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How-To-Guide On Getting Your Assets In Order

By on March 28, 2013 in Five Ways To Invest, Professional Posts, Retirement

How To get Your Assets In OrderIt is crucial to ensure your assets are in order, at all times. One of the main reasons is to protect your money and property against the unfortunate possibility of a terminal illness, or worse – death.

There’s no way of knowing when a terminal illness may strike, so it’s worth ensuring that your assets are organised and protected at all times. I mean, why would you? You are young and healthy- getting sick is the least thing on your mind right now.

However, as with anything in life, nothing is guaranteed and you can bet your bottom dollar that something will happen when you least expect it.

So what should you do? Here, the experts at www.cheselden.co.uk have put together a helpful guide:

Get a will

The first step is to make sure that your will is up to date. Without a valid will, your estate will automatically pass to your spouse if you’re married, or to your children if you have them; or to the closed living relative. If there is no will and no-one had a legal claim to your estate, your assets will revert to the state.

Having a will means that you can specify who you would like to inherit your assets, and also allows you to divide your assets between multiple persons. This can be especially useful in avoiding Inheritance Tax, which may apply to estates with a value of greater than £325,000.

So if you don’t want your assets to automatically pass to someone, you need to get it down in writing.

Record everything you own

Your estate consists of the value of your assets, minus the cost of your debts. If you die, the beneficiaries of your will cannot receive anything until a Probate has been issued, confirming the net value of your estate.

Probate settlement can sometimes take years, especially when the deceased has failed to keep accurate records. You can help to avoid this by making sure your records are in good order right now. Make a list of everything you own, including property, savings and investments.

Make a similar list of all outstanding debts; this will give you an idea of what you might leave behind, so that your estate might be settled quickly. Gather and file all paperwork relating to these items and store them in a secure location.

Try to make it as easy as possible for someone else to get their hands on the relevant information. If it is locked by a password or key, ensure that a trustworthy loved-one has access.

After all, you wouldn’t want to pass with the knowledge that your loved-ones are going to have to fight tooth and nail for several years, simply because you failed to record your estate accurately?

Don’t forget your pension

Remember that your pension is also an asset. You can nominate a beneficiary to receive your tax-free lump sum, if it has not already been claimed.

Additionally, it is important to know how to cover your care home fees, so that your assets are protected.

The article was written by Cheselden, the UK’s leading continuing care review specialists.  They are the only company with a panel of clinical experts dedicated to continuing care claims, so if you believe that a loved-one has wrongly paid care home fees, you can claim it back- even if they are now deceased. 

image - Twobee Freedigitalphotos.net
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Humble Investors – The New Investor Website

By on March 1, 2013 in Featured, Five Ways To Invest, humble savers commentry, Newsletter, Questions for humble savers, Retirement

HI Symbol

A quick message to our humble savers readers – We now have a new website up and running called

Humble Investors have been created for our readers who are wanting greater investment knowledge.

It has been written for the Aussie investor, however, much of the content will be useful no matter where you are from.

The website is unique as the content is coming directly from professional financial advisers and associated businesses. You hear all the latest investment news directly from the people who are helping their own clients to secure financial security.

Each financial adviser at Humble Investors will have their profile ‘on show’ and with one click you can ‘connect’

We would appreciate if you came along and visited the Humble Investors website. Any constructive feedback would be appreciated.

Humble Investors - Your Advice Hub

Important – humble savers will continue as a money saving website. You will notice more direct money saving opportunities over the coming months.

 

To join the the investment buzz at Humble Investors, just click on the link below

Click To Visit Humble Investors

A big thanks from the humble savers team for all your support.

 

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Living in Retirement With Low Interest Rates

By on December 11, 2012 in Five Ways To Invest, Professional Posts, Retirement

How To Live With Low Interest rates In RetirementAustralia is now witnessing some of the lowest interest rates on record and there is an expectation that low interest rates will be with us for quite some time. While good news for borrowers; for self funded retirees who are relying on bank deposit interest for income, this can be a very worrying time.

Many self-funded retirees will be forced to use their saved up capital to make ends meet.

Australia is not on its own. Low interest rates are now the ‘norm’ for the major industrialised countries around the world. In fact, the interest rates in Australia are still higher than most comparable countries.

How do low interest rates affect the self funded retiree?

If you are relying on traditional bank deposits for all your income, you will be in for a shock.

Monthly Income received at different interest rates

Investment

4%

5%

6%

7%

$400,000

1,333

1,667

2000

2,333

$600,000

2,000

2,500

3,000

3,500

$800,000

2,667

3,333

4,000

4,667

$1,000,000

3,333

4,167

5,000

5,833

 

A small change in the interest rates can mean a big difference in your income.  For example, the difference between a 4% and a 6% interest rate on $600,000 investment is $1,000 per month. Or to put it another way, your income has been slashed by 33.33%

Alternative investment options to cash in the bank

The good news is that there are plenty of alternative investments to cash. However, as with every investment each one will carry its own investment risk. The two most popular alternatives are shown below.

1.     A selection of good dividend paying stocks (shares)

The Australian stock market has a large number of stocks that pay strong dividends. For example, the major banks have been paying dividends in the region of 6%. However, the real return is greater than 8.5% as you receive a tax credit.

Important – Dividends in the hands of the shareholder (the investor), are generally received as ‘tax paid’. The tax paid will be at the company tax rate of 30%.  The government will treat this tax paid amount as a tax credit against your personal tax.

There are of course risks with share investing, including the shares of the Australian banks. Share prices will rise and fall and you need to comfortable knowing the investment value will fluctuate.

2.     Fixed Interest Securities (bonds)

Many major institutions, including the big four banks, will raise money for their businesses by issuing Fixed Income Securities to the open market.

Fixed Income Securities including bonds, come in all shapes and sizes these days. A popular investment is to purchase a bond that will pay a defined interest rate (referred to as a coupon rate) for a fixed period of time. The bonds can be traded on the open market.

Investors who hold bonds will normally benefit from a higher investment return compared to what they would typically receive from a bank term deposit.

As a general rule, the investment risk with Fixed Income Securities including bonds is greater than bank deposits but less volatile than investing in shares.

Review your investment strategy

There are different strategies available to maximise your net (after tax) investment return. Some popular options are highlighted below.

Self Managed Superannuation Fund (SMSF)

Funds held in a SMSF do not pay any tax, not even capital gains tax once they become pension funds. You will also receive the full benefit of any tax paid dividends (imputation tax credits) that flow through by owning shares in your SMSF.

Annuities

A fixed term annuity could be a favourable investment as part of your portfolio. Annuities pay a regular income which includes both interest and a return of your invested capital.

There is no tax payable on the capital that is returned and this benefit may provide additional tax savings across your portfolio. And knowing that you have secured your income, you can seek to invest a larger proportion of your portfolio into growth investments.

Are you eligible for other benefits?

Government pensions, allowances and utility discounts may not be out of your reach. The rules can be complex but for many people they are worth investigating. Additional pension and allowances may be gained from restructuring your investments.

Spend a little less – look at your budgets

As the old saying goes ‘A penny saved is a penny earned’. Working through a budget with a financial adviser to find some savings is a great place to start.

Start shopping around! Not so many years ago shopping around was expensive, but with the Internet it is now significantly easier and cheaper. There are plenty of websites that can help you find some real bargains.

And one last tip, when you are out shopping don’t be afraid to ask for a discount. Think of it this way – The major stores will price their goods knowing that some customers will get a discount. If you are not getting your discount, you are paying more for the goods so others can enjoy their discount.

 

This is a  Professional Adviser Post from Neil Heriot, an experienced financial adviser specialising at pre and post retirement planning. Neil and his team can be contacted at Boston Private Wealth 

 General Advice Warning 

Any advice given is general only and has not taken into account your objectives, financial situation or needs. Because of this, before acting on any advice, you should consult a financial planner to consider how appropriate the advice is to your objectives, financial situation and needs.

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How Women Can Reclaim Their Wealth

By on October 18, 2012 in Featured, Five Ways To Invest, Professional Posts

Reclaim Your WealthToday’s women come up against some acute financial hurdles. Family dynamics are very different in today’s world with many women being the breadwinner or managing single parent households. 

The wage disparity between men and women which still exists and the fact we live on average a lot longer, we as women need to work smarter and harder to achieve financial stability. 

When planning your financial well-being, consider a holistic view of creating wealth. Think about the small, actionable steps you can take today to steer your financial situation in the direction you want to go. Every step you take towards financial stability will make you better off each month. But don’t focus on getting rich. Focus on being money smart and financially stable.  

Earn it, Save it and Invest it

Before you can begin to save or invest, you need to have a regular source of income which is sufficient enough to cover your necessities and to give you some leftover for savings. Try and continue to have your own source of income even after you get married and have children.  Even a regular, part-time job can accumulate a steady stream of cash.

Your income is related to super or retirement savings, so by maintaining your income source you are also contributing towards your retirement.

Once you have an income which covers your basic monthly outgoings, you can then develop a proactive savings plan. Build a firm foundation with a plan to meet periodic, non-monthly expenses, such as car insurance, taxes, family holidays and even some long-term investments. Periodic savings are essential to make your financial life work.  Without it you are likely resort to credit cards for those unexpected expenses and get into debt.

Once you’ve set aside some money for investing lock it away into shares, term deposits, a managed fund or a property and make use of compound interest over time. Let the money work for you. If you plan on working all your life then you won’t need to invest for your retirement. However, unforeseen circumstances can happen at any time of your life which may not allow you to work. 

Accidents, disability and changes in family stability can all affect your long-term financial goals.  By investing early you can protect yourself and avoid financial problems that unexpectedly come up.

Be In The Driver Seat

Every woman should take charge of her own finances. Being in control of your finances means being in control of your life. You should know the bills you’re paying, keep track of what you owe and know what you’re entitled to especially in a relationship. Even if you aren’t the one earning money in the relationship, if anything happens you have the power to control your financial destiny, more so if you are aware of the finances. 

Education

Improve your financial wellbeing by gaining a better understanding of a broad range of personal finance topics, including creating a budget, managing your cash flow, using credit wisely, and saving for retirement. Learning as much as you can about how these tips, advice and resources can help you develop strong solid money management skills that will serve you today and for years to come.

Australian women today are smart, savvy and inspirational.  We run businesses and homes, we raise children, we study hard and we support our families.  Isn’t it time to apply those same important life skills and passions to our finances?

Post from  Women In The Black  - A community where the modern Australian woman from all walks of life can learn, share, discuss and act on opportunities to take control of her finances and ultimately secure a stable financial future. 

This is a professional post – If you would like to see your blog posts published at humble savers, please review our Professional Posts page – Thank you. 

General Advice Warning

The Information on this page has not taken into account your financial situation, needs or objectives. Before acting upon any advice, you should consider whether it is appropriate for you.

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Property Investing – Tips, Traps and Mistakes

By on October 15, 2012 in Debt, Five Ways To Invest, Professional Posts, Property

Investment Property - Tips, Mistakes and Traps

Buying an investment property is very exciting and with all the excitement, it can become easy to lose sight of what you are really trying to achieve.

The list below highlights:

    • Our tips for success
    • Common mistakes and traps to avoid. 

Tips 

  • Know exactly how much you can afford and build in a buffer. Get your finance organised before you look and factor in that interest rates might creep a bit higher.  Assume a few extra costs in the first few years. If you plan for a few things to go wrong, you’ll be okay if they do.
  • Focus on capital growth above all else. You will make far more money out of a great capital growth investment than you will out of one that has slightly more rental return.  Of course, yield can’t be ignored as you’re generally relying on it to fund the loan. The highest yielding properties are those in greatest demand. I recommend two-bedroom properties located within one kilometre of a train station.
  • Register your details on the top real estate websites. You’ll get first notification of new listings and some agencies, including ours, offer registered buyers the opportunity to inspect new properties before they are made publicly available.
  • Buy something that feels good. Many people say don’t buy an investment emotionally but I disagree. If it feels great to you then it will feel great to others in ten years when you decide to sell it.
  • Inspect at least 10 properties before you buy. Even if the first one seems perfect, make sure you see enough to really know the market and recognise a good buy.
  • Change the time you inspect properties. Open for inspections are great because they allow you to see a lot of properties in a short time but make sure you go back and see the property you like at different times of day and also on different days to make sure it presents well at other times.
  • Buy older style houses or apartments for better growth.
  • Take a seven-year view, as most property cycles revolve every seven years so make sure you can stay the distance to get real growth.

Mistakes

  • Overpaying because you haven’t done enough research. Much of your profit can come in the buying if you do it right.
  • Not putting in the effort required. Make looking for your investment a second job, as it will pay more than your first job if you get it right!
  • Buying without emotion – real growth comes when you unearth a hidden gem so buy something that excites you.

Traps

  • Buying brand new. It often looks and feels great, but capital growth can be delayed when you buy into a brand new building. Older properties often have better growth in the first five years.
  • Overextending yourself. If you can hold a property in a good location for seven to eight years, you should be able to realise a substantial profit every time.  If you stretch yourself too far and have to sell, you may end up losing money. Make sure you can afford what you’re investing in.
  • Buying with friends. Although it can seem easier to buy the property you want if you go halves with a friend, it can come undone if you have different views or circumstances down the track on the time to sell. If you are forced to sell prematurely or at the wrong time, you may lose much of your gain.

 

Written by Aimee Hadley  from  Piccadilly Financial Group

This is a professional post – If you would like to see your blog posts published at humble savers, please review our Professional Posts page – Thank you.

 

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