Oct262015
Financial PlannersNewsWealth Protection Emergency Buffer Fund - Financial Planners Perth

How Large is Your Emergency Buffer Fund?

Financial Planners, News, Wealth Protection

We have provided financial planning for a lot of your Perth neighbours; our financial planners have more than 40 years’ combined experience. When we are getting to know your financial situation, we like to find out what your assets and liabilities are so we can devise a way to get you to where you want to be when you want to be there.

One of the questions we like to ask is, “How much money do you have set away as an emergency buffer fund?”

Emergency Buffer Fund?

We know that getting through life to the next paycheck is tough for a lot of people. That’s why we feel it is important to have money stashed away in case things go awry. We are not allowed to provide any individual advice on this blog. If you want individual advice, you have to come in for a consultation. Everyone’s finances are different and blanket statements aren’t always valid for everyone.

That being said, a good “rule of thumb” is that three months’ worth of income is a good “buffer” to have in case of emergency. There are many factors that can affect how much of a buffer is appropriate for you. Some of those factors include, excessive debt, one income supporting a household, self-employment, an old car for transport or living expenses that exceed 50% of your take-home pay.

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Oct232015
Financial PlannersInvestment Planning Handling a Volatile Investment Market

Tips for Handling a Volatile Investment Market

Financial Planners, Investment Planning

Financial advisors, in Perth and across the world, are expected to make sense of what can sometimes be a volatile market for investors. At Approved Financial Planners, we have been a trusted name in the Perth market since 2005. We are now backed by parent company AMP Capital, giving us even more resources and information to help investors weather “storms” or volatile periods in the markets.

One of those resources is Dr Shane Oliver, who is the Chief Economist and the Head of Investment Strategy and Economics at AMP Capital. Recently, on the AMP Capital blog, Dr Oliver provided tips for investors during times of volatility. We would like to share them with you.

Expect Volatility

According to Dr Oliver, one should expect the market for shares to be volatile. He sees it as “the price you pay” for the eventual long term gains that shares typically produce. For example, Dr Oliver sees recent global volatility as “just a correction” that won’t affect long term returns.*

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Oct192015
Financial PlannersNews Teach Children To Save - Financial Planning Perth

Teaching Children a Lifetime of Good Financial Habits

Financial Planners, News

Any Perth financial planner can tell you that it’s never too early to start saving money, but we are serious about it. We believe that children should be taught good financial habits as early as possible. MoneySmart, the website of the Australian Securities & Investments Commission (ASIC), agrees with us.

Recently, we spent some time on the ASIC website and looked at an article called “Teaching Kids About Money.” According to ASIC, it is more important to teach kids about money now than in any previous generation. They believe that teaching kids about money will help them make better decisions as adults.

Budgeting, Spending and Saving: Crucial Skills

ASIC recommends teaching children how to budget, spend and save money as early as possible. They see it as a vital part of a child’s development. They have a video on the website called “Teaching kids how to budget to become financially savvy.” We recommend this video to children. Not only does it do exactly what it says, it also tells children about two MoneySmart apps: Budget Planner and TrackMySpend.

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Oct92015
Financial Planners Active Asset Allocation Must Be Done Correctl

Why Active Asset Allocation Must Be Done Correctly

Financial Planners

Financial planning, in Perth and across Australia, is a field that is constantly evolving. Recently, Dr Shane Oliver, Chief Economist and Head of Investment Strategy and Economics at our parent company, AMP Capital, published a wealth of information on active asset allocation.*

We would like to share some of the information with you to help you understand the importance of allocating your assets correctly.

Overview

In the long term, growth assets such as shares can provide huge returns due to compound interest. However, growth assets regularly go through periods of high volatility. This causes some investors to react to periods of low value by selling these assets off and resorting to cash investments, which don’t often produce losses but don’t produce long term returns, either.*

The key, according to Dr Oliver, is to use one of two strategies. The preferred strategy is to stick with assets for the long term and take advantage of the growth. However, Dr Oliver also recommends what he calls a “rigorous approach to dynamically varying the asset mix” if one can’t hold onto an investment long term or wants to take advantage of cyclical swings in the markets.*

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Oct22015
Financial PlannersNews Steady Capital or Sustainable Income

Do You Need Steady Capital or Sustainable Income?

Financial Planners, News

As providers of a wide range of financial services in Perth, we have helped a lot of your neighbours achieve their financial goals. However, there is no such thing as a “one size fits all” investment because everyone’s individual situation is different.

One of the basic questions we like to ask our clients is whether they are looking for steady capital or sustainable income. Recently, our parent company, AMP Capital, addressed the effects of the low cash interest rate on cash investments. While a low cash interest rate is good for the economy, it tends to reduce the value of cash investments such as term deposits.*

As you probably know, the cash interest rate is still at a record 2.0%. For comparison, it was at 7.25% in August 2008 and 4.75% in November 2011. *

Cash Investments

Term deposits and other cash investments have traditionally been regarded as “safe” investments because the value of those investments is usually stable. Historically, interest rates have been enough, even when in a “low” cycle, to provide adequate return on investment (ROI). However, interest rates are now at record low levels.*

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Sep302015
Financial PlannersSuperannuation Fund Pitfalls For Setting up an SMSF

Setting up an SMSF? Watch Out for These Pitfalls.

Financial Planners, Superannuation Fund

A lot of Australians are opting out of their employer’s superannuation funds and setting up self managed superannuation funds (SMSF’s). At Approved Financial Planners, we have helped numerous people in the Perth area with their SMSF’s.

According to the Financial Planning Association (FPA), though, some costly mistakes are common among those establishing SMSF’s. Here are a few of them.

Letting Your Money Sit

Some Australians who opt for SMSF’s put their money into them but just let it sit as cash. The FPA stresses the importance of those who establish an SMSF having a plan and a strategy for how their funds are going to be invested.*

Inaccurate Assessment of Costs

It can cost a lot of money initially to set up an SMSF. Then there are ongoing costs, such as investment fees, legal advice and ongoing accounting. If there is a corporate trustee, it will cost money to maintain the trustee structure.*

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Sep242015
Financial PlannersNewsSuperannuation Fund Right Choices As SMSF Trustee

Making the Right Choices as an SMSF Trustee

Financial Planners, News, Superannuation Fund

With over 40 years combined experience in the financial services industry, we have been providing advice on self managed superannuation funds (SMSF’s) to Perth area investors since self management of superannuation funds became an option in late 1999.

Recently, our parent company, AMP Capital, conducted research on what SMSF trustees considered to be the most difficult part of managing an SMSF. The research was conducted by Investment Trends.*

Poll Results:*

Most Difficult Task:*

27%: Investment selection.
24%: Keeping track of SMSF rule and regulation changes.
23%: Administration and paperwork.
19%: Finding enough time to conduct investment research.

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Sep222015
Financial PlannersNewsSuperannuation Fund Splitting Super With Your Spouse

Splitting Super Contributions with Your Spouse

Financial Planners, News, Superannuation Fund

Superannuation splitting is a concept that we have shared with a growing number of our Perth area clients. Known as “super splitting,” it is a way you can split your before tax or concessional super contributions with your spouse. The two most common types of concessional super contributions are your arranged salary sacrifice contributions and your employer’s mandatory contributions under the superannuation guarantee.*

If your super fund allows you to do it, you can split contributions to a different fund or within the same fund. While contributions can be split, your super fund’s account balance cannot. If you wish to split your contributions, you must be in a de facto relationship or married to the person with whom you are splitting your super contributions.*

To receive split contributions, your spouse must be under 55 years of age or between 55 and 64 but not retired (other conditions may apply). If your spouse is 65 or more years of age, you cannot split any superannuation contributions.*

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Sep182015
Financial PlannersNews Financial Information If Getting A Divorce

Getting Divorced? This Information Could be Valuable to Your Financial Future.

Financial Planners, News

We are biased, but we think Perth is the best place to live in Australia. However, even Perth isn’t immune to marriages ending in divorce. While it is important to have the right divorce lawyer, it is also important to have the right financial planner.

According to a recent blog post by the Financial Planning Association of Australia (FPA), one out of three marriages will end in divorce, after an average period of 12.2 years. The average age of divorce for men is 44.1 years, while the average age for women is 41.5 years.*

The FPA notes that in the absence of a prenuptial agreement, known as a BFA or binding financial agreement, the distribution of assets is negotiated. The longer and more deeply lawyers are involved, the more of your assets end up being paid as legal fees. The FPA recommends an “amicable asset split agreement” whenever possible.*

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Sep172015
Financial PlannersNews Financial Planners Help Balance Present and Future Lifestyle

How the Right Financial Planner can Balance Your Present Lifestyle with Your Future

Financial Planners, News

In Perth, financial planners have an important job to do. We have to help you live the kind of lifestyle you want now while helping you plan for your future. Most people want to live well now, but they want to have enough money to live well in the future, too. We understand that and are experts at helping you strike that balance.

We know that everyone has different “drivers” in their lives. Some like to take vacations. Some like to play golf. Some like to fish or boat. Some like knowing that their children’s college education will be taken care of for them. Some place the most importance in the house they live in.

In Perth, it can be quite expensive to do many of these things. That makes it even more beneficial for people to maximise every dollar they earn, both in the present and the future.

How We Help You Meet Your Goals

At Approved Financial Planners, it all starts with your goals. When you talk to one of our financial planners, we can start with your goals. Then, we find out your resources, such as assets and income. We also take your monthly expenses into consideration. Your superannuation fund is also important. Some people decide to use a self managed superannuation fund and make extra contributions through the fund.

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