Protect Your Most Valuable Asset – Your Income	3/7/2008
Most people consider their house or car to be their most valuable asset and protect these items with appropriate insurance. However, what about your ability to earn an income? The average Australian will earn well over $1 million in their lifetime, so for most people, the ability to earn an income is a far more valuable asset than their home or car. One in six women and one in four men between the ages of 35 and 65 can expect to be off work for 6 months or more due to an accident or disability. However despite these alarming statistics, few Australians consider the financial ramifications of being out of work for an ongoing period of time - until it happens to them. Basic Wealth Protection starts with Income Protection Insurance, which provides up to 75% of gross income in the event that you are unable to work due to accident or illness. The cover can last up to the age of 65. Surviving without an income for a few weeks may be manageable; however, if this continues for an extended period, paying a mortgage and hospital bills (let alone day-to-day expenses) becomes increasingly difficult. In these cases, having a Wealth Protection plan in place can be a life saver, especially if you have a family to look after. Although people spend thousands of dollars per year insuring their homes and cars, they fail to insure the one asset that pays for all these things – their income. Income Protection Insurances costs around 1 - 2% of your gross income, so it is really a small price to pay for financial security. Additionally, it is tax deductible and can be claimed in the current financial year if paid in advance. Having an accident or illness is stressful enough, without having to worry about finances. Income Protection gives you peace of mind so you can concentrate on recuperating and looking after your family. By making a small sacrifice now, you achieve instant financial protection for yourself and your family.
Quoting your Tax File Number (TFN) to your super fund	29/5/2008
It is not compulsory to quote your TFN to your superannuation fund. However, if you don't you will automatically have to pay a higher rate of tax, 31.5% on taxable contributions such as employer contributions. This is in addition to the maximum 15% contribution tax. Further, without your TFN, your super fund will not accept any non-taxable contributions. And when it comes time to receive your benefit payments, either a lump sum payment or a pension payment, and you have not supplied your TFN, you will be subject to tax at the highest marginal rate on the taxable component. Should you need assistance with the quoting of your TFN to your super fund, please phone our Financial Planning team on 07 4995 6366.
Timing isn’t everything: Anytime is the ‘right time’ to invest	21/1/2008
National and global markets are presently challenging investors, nevertheless, waiting for the ‘best time’ to invest on the sharemarket, actually prevents many people from achieving financial freedom. Timing investment markets is impossible to do with any real accuracy. Research shows that investment 'speculators' tend to buy when prices are high and sell when they are low. The success of an investment portfolio depends on the length of time you spend in the market, NOT on your ability to buy and sell based on short-term market fluctuations. Rather than timing the market, the secret to successful investing is to buy quality stocks with a history of rising dividends and rising capital values and hold onto them. This strategy is successful because every time you buy or sell in the stockmarket, you incur trading costs and Capital Gains Tax (CGT). This means that every time you sell an investment and take your money, you will have LESS money to invest next time. Timing doesn’t matter so much with diversified investments. When you invest in more than one asset class, for example, some Australian shares and some International shares, there is less reason to panic when the market appears low. The timing matters less as one stock’s "good’ time can balance out another stock’s ‘bad’ time.” Successful investment plans such as ‘dollar cost averaging’ are not based on timing the market at all; instead, a consistent amount is invested steadily. It doesn’t matter if investment prices are high or low when they are bought. The amount you invest is consistent, so fewer shares are bought when their price is higher, and more when the price is lower. The fact that strategies such as dollar cost averaging and diversification are not based on timing, and can be very successful, indicates that the right time to invest really can be any time.
Looking for a Home Loan?	4/7/2007
Looking for a home loan can be daunting, and with the recent rises in interest rates (and with future interest rate changes expected), finding a competitively priced loan is more important than ever. With so many home loan products on the market, home buyers need take heed when comparing loans and make sure they get the right advice from a lending professional. It is important that you look for loans with features that will save you money over the long term, rather than looking for a short term fix. For instance, low introductory rates are one tactic banks and financial institutions use to attract customers. What appears to be a good interest rate in the beginning, can often only apply for a few months. From there on, the interest rate may changed to a higher rate and the loan ends up costing you more in the long run than a loan which has a standard rate. Making certain you are comfortable with the repayment structure is one of the most important considerations when choosing a loan. Having the ability to make regular repayments is one thing, but you should also make sure that the loan structure allows for further interest rate rises. A loan which doesn’t allow this buffer, could expose you to trouble later on down the track if your repayments increase and you are unable to afford them. Getting the right advice is the key to choosing the right loan and owning your home faster and Wayne at Accounting & You can help you in this regard. You can contact him on 4995 6366 or by email wayne.harch@aayfinancial.com.au

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