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Intergenerational Wealth News

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Intergenerational Wealth Monthly Market Wrap November 2020

Pandemic concerns reappear…

  • Global shares fell -3.2% and -1.1% in hedged and unhedged terms, respectively. Global equities were led on the downside by both US and European equities with the German market down over -9.4%.
  • Emerging markets rose 4.2% during September in Australian Dollar (AUD) terms with the Chinese market performing strongly whilst other developing economies such as India continue to see slowing coronavirus case growth.
  • Australian shares outperformed global shares rising 1.9% in October. The market was led by strength from the banking (Financials up 6.3%) and tech sectors (up 8.96%).
  • The Australian dollar (AUD) acted as a buffer falling -2% against major currencies and -1.9% against the US dollar.
  • Fixed income returns were positive domestically but flat internationally. Speculation over another RBA rate cut, and additional quantitative easing was an important support. Rising US bond yields following a strong GDP result drove the flat outcome for global bonds even as corporate bonds had positive returns.

 

As cases escalated in Europe

Globally

  • The continued pace of cases in Europe accelerated further and triggered new lockdown restrictions across France, Germany and other major countries. This raised the risk of another quarter of negative growth in Europe.
  • US case growth also accelerated prompting renewed calls for further government stimulus.
  • President Trump appears to have been defeated in the 2020 US Presidential election by Democrat nominee Joe Biden.

Locally

  • The Federal Budget for FY21 was well received with consumer confidence bouncing strongly on the back of tax cuts being brought forward.
  • The RBA cut interest rates by 0.15% to a new low of 0.1% and announced further extension of its bond purchasing program intended to drive long-term borrowing costs lower and help reduce the attractiveness of our currency (by reducing the difference between our bond yields and other countries).
  • It appears that the September quarter this year was the end of the Australian recession with positive growth likely to be recorded as the relaxation of lockdowns across the country saw consumer spending recover (on a volume basis) while government stimulus in JobKeeper and JobSeeker remained supportive though tapering began in October).

Major asset class performance

Asset classes 1 month
%
1 year
%
5 years (p.a.) %
Australian shares 1.9% -8.1% 6.8%
Global shares (hedged) -3.2% 1.1% 8.0%
Global shares (unhedged) -1.1% 2.7% 8.5%
Global small companies (unhedged) 2.1% -1.9% 7.1%
Global emerging markets (unhedged) 4.2% 6.2% 8.3%
Global listed property (hedged) -3.4% -25.5% 0.0%
Cash 0.0% 0.5% 1.6%
Australian fixed income 0.3% 4.0% 4.5%
International fixed income 0.0% 3.8% 4.4%
Source: Bloomberg & IOOF, 31 October 2020

Indices used: Australian Shares: S&P/ASX 200 Accumulation Index, Global shares (hedged): MSCI World ex Australia Net Total Return (in AUD), Global shares (unhedged): MSCI World ex Australia Hedged AUD Net Total Return Index; Global small companies (unhedged): MSCI World Small Cap Net Total Return USD Index (in AUD); Global emerging markets (unhedged): MSCI Emerging Markets EM Net Total Return AUD Index; Global listed property (hedged): FTSE EPRA/NAREIT Developed Index Hedged in AUD Net Total Return; Cash: Bloomberg AusBond Bank Bill Index; Australian fixed income: Bloomberg AusBond Composite 0+ Yr Index; International fixed income: Bloomberg Barclays Global Aggregate Total Return Index Value Hedged AUD

Please note: Past performance is not indicative of future performance

 

Currency markets

Exchange rates At close on 31/10 1 month
change
%
1 year
change
%
USD/AUD 0.70 -1.9% 1.9%
Euro/AUD 0.60 -1.2% -2.4%
Yen/AUD 73.6 -2.6% -1.2%
Trade weighted index 59.5 -2.0% -0.8%
Source: Bloomberg & IOOF, 31 October 2020. All foreign exchange rates are rounded to two decimal places where appropriate.

Please note: Past performance is not indicative of future performance.

Disclaimer: This report has been prepared by the IOOF Research team for RI Advice Group Pty Ltd ABN 23 001 774 125 AFSL 238429. RI Advice Group Pty Ltd is a company within the IOOF group of companies consisting of IOOF Holdings Limited ABN 49 100 103 722 and its related bodies corporate. This report is current as at the date of issue but may be superseded by future publications. The information in the report may not be reproduced, distributed or published by any recipient for any purpose without the prior written consent of RI Advice Group Pty Ltd. This report may be used on the express condition that you have obtained a copy of the RI Advice Group Pty Ltd Financial Services Guide (FSG) from the website. RI Advice Group Pty Ltd and/or its associated entities, directors and/or its employees may have a material interest in, and may earn brokerage from, any securities or other financial products referred to in this report, or may provide services to the companies referred to in this report. This report is not available for distribution outside Australia and may not be passed on to any third person without the prior written consent of RI Advice Group Pty. RI Advice Group Pty and associated persons (including persons from whom information in this report is sourced) may do business or seek to do business with companies covered in its research reports. As a result, investors should be aware that the firms or other such persons may have a conflict of interest that could affect the objectivity of this report. Investors should consider this report as a single factor in making an investment decision. This report has been prepared in good faith and with reasonable care. Neither RI Advice Group Pty nor any other person makes any representation or warranty, express or implied, as to the accuracy, reliability, reasonableness or completeness of the contents of this document (including any projections, forecasts, estimates, prospects and returns and any omissions from this document). To the maximum extent permitted by law RI Advice Group Pty, its related bodies corporate and their respective officers, employees, representatives and associates disclaim and exclude all liability for any loss or damage (whether foreseeable or not foreseeable) suffered or incurred by any person acting on any information (including any projections, forecasts, estimates, prospects and returns) provided in, or omitted from this report. General Advice Disclaimer: The information in this report is general advice only and does not take into account your financial circumstances, needs and objectives. Before making any decision based on this report, you should assess your own circumstances or seek advice from a financial adviser. Where applicable, you should obtain and consider a copy of the Product Disclosure Statement, prospectus or other disclosure material relevant to the financial product before you acquire a financial product. It is important to note that investments may go up and down and past performance is not an indicator of future performance.
For information regarding any potential conflicts of interest and analyst holdings; IOOF Research Team’s coverage criteria, methodology and spread of ratings; and summary information about the qualifications and experience of the IOOF Research Team please visit https://www.ioof.com.au/adviser/investment_funds/ioof_advice_research_process.
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The value of having a financial adviser

Having an appropriate financial plan in place covers more than just investments and insurance. The same goes for a financial adviser – there are some you will just click with, who you will feel comfortable opening up to and working with over the long term, to improve your financial future.

 

You’re better off

Research by the Financial Services Council showed people who received financial advice were almost $100,000 better off at retirement1. That’s a big difference and could mean you are financially more comfortable for more retirement years.

Further studies by CoreData for Fidelity in 2019 revealed that 88.5% of Australians receiving advice believe it has given them greater peace of mind financially and 86.2% of Australians receiving advice believe it has given them greater control over their financial situation.

 

Keep on track

Over the long term investment markets tend to fluctuate. This can be difficult for some people, as they worry about whether they will have enough money for their goals- like renovating the home, international travel, or saving for a comfortable retirement. A concern may be whether to make adjustments now, to fund a better financial future.

Having an experienced financial adviser to help you structure your investment portfolio, based on your age and risk tolerance, will help you ride out any ups and downs.

Working with a financial adviser who understands you and your situation means they will look for opportunities for you, and make ongoing recommendations and changes to your plan. If you get worried about something, having an adviser to remind you about your long term financial strategy will help you see that short-term volatility is just part of your long term financial journey.

 

Stay protected

While you may already have some form of insurance in place, perhaps through your employer or super fund, do you really know how much you have and what it covers? Is it sufficient? What would be the financial impact if you were unable to work for extended period due to illness or injury? Reviewing insurance is one of those things that if delayed, the risks can get larger and larger.

An experienced financial adviser will be able to explain exactly what you are covered for, identify any gaps and recommend changes, so your future is protected and you can rest easy.

 

Realise your potential

To help you reach your full financial potential, an experienced financial adviser can discuss a wide range of financial topics. While there’s no doubt that investments and insurance are important when building your wealth, so too is managing your cashflow, budgeting, tax planning, transitioning to retirement, aged care and estate planning.

Seeking professional advice on your whole financial situation can go a long way to helping you make the most of what you have, whatever your age or income.

 

The comfort of having a professional financial adviser

Taking the time to find an experienced, professional financial adviser who makes you feel comfortable and at ease so you can have peace of mind when it comes to your financial future makes good sense.

As we say goodbye to a challenging 2020, let’s look forward to a brighter 2021. If your finances were hit with the full force of COVID-19, we can help get you back on track. We have capacity to take on new clients, so if this article is of interest to you, your friends or your family, we would love the chance to discuss them further.

Sources:
1The ‘Better off with savings advice’, 16 February 2011, research shows that a 30 year old would save an additional $91,000, a 45 year old would save an additional $80,000 and a 60 year old would save $29,000 more than those without a financial adviser.
2 https://www.fidelity.com.au/insights/investment-articles/the-value-of-advice/
This editorial and the information within, including tax, does not consider your personal circumstances and is general advice only. It has been prepared without taking into account any of your individual objectives, financial solutions or needs. Before acting on this information you should consider its appropriateness, having regard to your own objectives, financial situation and needs. You should read the relevant Product Disclosure Statements and seek personal advice from a qualified financial adviser. From time to time we may send you informative updates and details of the range of services we can provide. If you no longer want to receive this information please contact our office to opt out. The views expressed in this publication are solely those of the author; they are not reflective or indicative of Licensee’s position, and are not to be attributed to the Licensee. They cannot be reproduced in any form without the express written consent of the author. RI Advice Group Pty Limited ABN 23 001 774 125, AFSL 238429.
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Intergenerational Wealth Monthly Market Wrap October 2020

“Risk on” rally faltered…

  • Global shares fell 2.9% and 0.3% in hedged and unhedged terms, respectively. Global equities were led on the downside by the US market with Tech stocks struggling as the tech-heavy Nasdaq Index fell by -5.2% in USD terms.
  • Emerging markets rose 1.5% during September in Australian Dollar (AUD) terms.
  • Australian shares underperformed global shares falling
    -3.7% in September. The month was defined more by global events as well as local concerns for our Banking sector. Banks remain a large part of our market and heightened speculation of another RBA rate cut hurt the sector. This is because a large amount of bank revenue relies on the spread between the rates they charge and their cost of funding. Lowering rates constrains the ability to generate interest income and saw the Financials sector slump -6.9%.
  • The Australian dollar (AUD) also faltered with a -3% fall against major currencies and a -2.9% fall against the US dollar.
  • Fixed income returns were positive with Australian and international bond benchmarks rising 1.1% and 0.4% during September. Speculation of another RBA interest rate cut and concern over a surge in coronavirus cases in Europe drove bond yields lower (and returns higher).

 

As the pandemic gained momentum

Globally

  • In our August update we highlighted the surge in cases within Europe. This continued into September and has triggered new but limited restrictions on people’s freedom of movement and certain businesses in the UK amongst other countries.
  • President Trump was himself infected with the coronavirus but has since, it appears, recovered.

Locally

  • The RBA left interest rates on hold as market speculation of another rate cut following the FY21 Budget intensified.
  • Coronavirus case growth in Victoria has continued to slow with lockdown restrictions being eased while in NSW we are seeing a return to larger scale public events from late October.
  • Economic data was mixed with the unemployment rate falling to 6.8% (down from 7.5%) in a positive sign for most States excluding Victoria. However, August retail sales fell 4% with weakness pronounced across the board suggesting the 3.2% surge in July may have been more reliant on early release of superannuation funds which has since slowed.

Major asset class performance

 

Asset classes 1 month
%
1 year
%
5 years (p.a.) %
Australian shares 0.5% -9.9%      5.1%
Global shares (hedged to AUD) 3.3% 3.5% 7.5%
Global shares (unhedged) 0.6% 3.4% 8.1%
Global small companies (unhedged) 0.2% -5.7% 5.6%
Global emerging markets (unhedged) 4.6% 2.4%      6.7%
Global listed property (hedged to AUD)    1.2% -17.4% 1.0%
Cash 0.0% 0.7% 1.7%
Australian fixed income 0.4% 3.6% 4.6%
International fixed income 1.0% 5.5% 4.7%

 

 Source: Bloomberg & IOOF, 31 July 2020

Indices used: Australian Shares: S&P/ASX 200 Accumulation Index, Global shares (hedged): MSCI World ex Australia Net Total Return (in AUD), Global shares (unhedged): MSCI World ex Australia Hedged AUD Net Total Return Index; Global small companies (unhedged): MSCI World Small Cap Net Total Return USD Index (in AUD); Global emerging markets (unhedged): MSCI Emerging Markets EM Net Total Return AUD Index; Global listed property (hedged): FTSE EPRA/NAREIT Developed Index Hedged in AUD Net Total Return; Cash: Bloomberg AusBond Bank Bill Index; Australian fixed income: Bloomberg AusBond Composite 0+ Yr Index; International fixed income: Bloomberg Barclays Global Aggregate Total Return Index Value Hedged AUD
Please note: Past performance is not indicative of future performance
Disclaimer: This report has been prepared by the IOOF Research team for RI Advice Group Pty Ltd ABN 23 001 774 125 AFSL 238429. RI Advice Group Pty Ltd is a company within the IOOF group of companies consisting of IOOF Holdings Limited ABN 49 100 103 722 and its related bodies corporate. This report is current as at the date of issue but may be superseded by future publications. The information in the report may not be reproduced, distributed or published by any recipient for any purpose without the prior written consent of RI Advice Group Pty Ltd. This report may be used on the express condition that you have obtained a copy of the RI Advice Group Pty Ltd Financial Services Guide (FSG) from the website. RI Advice Group Pty Ltd and/or its associated entities, directors and/or its employees may have a material interest in, and may earn brokerage from, any securities or other financial products referred to in this report, or may provide services to the companies referred to in this report. This report is not available for distribution outside Australia and may not be passed on to any third person without the prior written consent of RI Advice Group Pty. RI Advice Group Pty and associated persons (including persons from whom information in this report is sourced) may do business or seek to do business with companies covered in its research reports. As a result, investors should be aware that the firms or other such persons may have a conflict of interest that could affect the objectivity of this report. Investors should consider this report as a single factor in making an investment decision. This report has been prepared in good faith and with reasonable care. Neither RI Advice Group Pty nor any other person makes any representation or warranty, express or implied, as to the accuracy, reliability, reasonableness or completeness of the contents of this document (including any projections, forecasts, estimates, prospects and returns and any omissions from this document). To the maximum extent permitted by law RI Advice Group Pty, its related bodies corporate and their respective officers, employees, representatives and associates disclaim and exclude all liability for any loss or damage (whether foreseeable or not foreseeable) suffered or incurred by any person acting on any information (including any projections, forecasts, estimates, prospects and returns) provided in, or omitted from this report. General Advice Disclaimer: The information in this report is general advice only and does not take into account your financial circumstances, needs and objectives. Before making any decision based on this report, you should assess your own circumstances or seek advice from a financial adviser. Where applicable, you should obtain and consider a copy of the Product Disclosure Statement, prospectus or other disclosure material relevant to the financial product before you acquire a financial product. It is important to note that investments may go up and down and past performance is not an indicator of future performance.
For information regarding any potential conflicts of interest and analyst holdings; IOOF Research Team’s coverage criteria, methodology and spread of ratings; and summary information about the qualifications and experience of the IOOF Research Team please visit https://www.ioof.com.au/adviser/investment_funds/ioof_advice_research_process.
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Developing better money habits

Developing better money habits

The cost of goods and services will always be on the rise

The increasing cost of goods and services is a reality most Australians have to deal with. Data from the Australian Bureau of Statistics shows that living expenses for employee households were up by 1.1% from March 2020, compared to March 20191. This may not seem like a lot, but if living expenses go up and wages stay stagnant, it makes an impact of your overall household income and expenses ratio.

 

As well as costing more, we generally want more, as we fill our homes with the latest gadget or upgraded model of a good and lean more on outsourced services to keep our homes and families running smoothly in an ever-changing world.

 

Knowing that the cost of things goes up simply mean you need to be more organised and create a priority list for yourself.

 

Cut back on major expenses

Trimming your expenses is one of the easier ways to manage the high cost of living. But rather than taking a piecemeal approach, it may be more effective to cut back on some of the largest drains on your earnings, such as food and transport costs. Keep track of what you spend on food and transport each month and then look at ways you can get savvier to make some savings.

 

Re-evaluate lifestyle costs

It may be worth auditing your lifestyle costs to see if you could decrease them. While you don’t have to give up all the things you enjoy, cutting down on, for example, overseas holidays, dining out or purchasing the latest gadget could go a long way in reducing your costs. Enjoying a few lifestyle luxuries is one thing, but don’t make a habit of it. Think about the fun you can have at home with friends and family or take advantage of free events, festivals and community services.

 

When you need new things such as clothes, furniture, white goods or a car, think about whether you can find them second-hand or upcycled. There are many websites and groups where you can find what you need, without needing to purchase it new.

 

Create a budget

Having a budget and sticking to it may help you minimise unnecessary expenses. A budget tracks your weekly or monthly spending and may help ensure you have enough money to cover essentials, build up your savings and handle unexpected or increased costs. You may wish to consider working with a professional financial adviser to create a budget that factors in your income, expenses and financial obligations.

 

Supplement your income

Increasing your income may be another way to manage the rising cost of living. You could take on extra work in your spare time or start a side business. For example, you could become a private tutor in your field of expertise, rent out your spare room or pet sit.

 

If you have enough savings on top of your contingency fund, you may want to invest to grow your capital and earn interest. Your financial adviser may recommend strategies to help you generate an income from your investments.

The high cost of living may affect your savings and lead to money-related stress. But if you’re smart about your finances, you could keep your cost of living in check and remain financially secure.

 

1467.0 – Selected Living Cost Indexes, Australia, Mar 2020 (https://www.abs.gov.au/ausstats/abs@.nsf/mf/6467.0)

Intergenerational Wealth

“Building sustainable wealth for generations”.
Phone: (03) 9326 1594 or (03) 9746 7643
Email: info@igwealth.com.au
This editorial and the information within, including tax, does not consider your personal circumstances and is general advice only. It has been prepared without taking into account any of your individual objectives, financial solutions or needs. Before acting on this information you should consider its appropriateness, having regard to your own objectives, financial situation and needs. You should read the relevant Product Disclosure Statements and seek personal advice from a qualified financial adviser. From time to time we may send you informative updates and details of the range of services we can provide. If you no longer want to receive this information please contact our office to opt out. The views expressed in this publication are solely those of the author; they are not reflective or indicative of Licensee’s position, and are not to be attributed to the Licensee. They cannot be reproduced in any form without the express written consent of the author. RI Advice Group Pty Limited ABN 23 001 774 125, AFSL 238429.
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Budget update 2020-21 Federal Budget Summary

Federal Budget Summary

The announcements in this update are proposals unless stated otherwise. These proposals need to successfully pass through Parliament before becoming law and may be subject to change during this process.

 

Overview

The 2020 Budget is all about jobs, jobs and spending to make more jobs. We already have JobSeeker and JobKeeper, and now we have JobMaker and JobTrainer.

Each announcement the Treasurer made was translated into jobs. Tax cuts for 11 million taxpayers equals 50,000 new jobs; expanding the instant asset write-off and the carry back of current losses is another 50,000 jobs.

Bringing forward the Stage 2 personal income tax cuts were the order of the day, and there will be no increases in tax in order to pay for spending. So unlike other economic downturns, there will be no deficits tax on high income earners.

One key theme throughout the Budget, is that the Government is keen to improve outcomes for young people. We know this recession has hit young people hard and many have taken early release of their super.

Please see link below.

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Have you got income protection?

UPDATE | Have you got income protection?

Also known as ‘salary continuance insurance’, income protection provides a portion of your income if you are unable to work due to injury or sickness for a certain period of time. The portion of income paid could be up to 75% of your salary depending on the policy.

Income protection changes effective 1 July 2021

Australian Prudential Regulation Authority (APRA) is the regulator of Life companies in Australia. APRA has determined that the Income Protection polices currently available via financial advisers are too generous in their terms and conditions, with claims paid far exceeding the insurance premiums received over the past decade.

For this reason, the way that policies are offered to clients will change in the future. APRA will force insurers to stop offering these types of policies to new clients after 30 June 2021. However, Income Protection policies in place before this date will be able to retain their coverage without any changes to the policy wording, until the policies expire (typically when you turn 65), assuming you retain the policy.

In contrast, new Income Protection policies issued after 1 July 2021 will have a different range of benefits and terms and conditions. Early indications from APRA are that these new income protection policies will expire every five years. If enacted, these five yearly policy expiries could mean that some policies holders will be unable to renew, or press pause on this important cover. This could be due to:

  • Someone whose income has stopped (e.g. to raise children or care for aging family members).
  • Someone with variable income (e.g. self-employed in industries experiencing an economic downturn).
  • Changing career or work status (e.g. a previously employed tradesperson becoming a self-employed contractor).

These changes may mean that you have lesser flexibility if your work status changes for one of the above reasons.

 

Act now

There is a window of opportunity right now to get a superior income protection policy that won’t exist for new clients after 1 July 2021. If you are currently working and don’t have Income Protection cover, we can help you to review your current situation to determine how much cover you need and discuss with you the reasons why Income Protection might be right for you. For peace of mind it is worth having a chat to see if income protection insurance is something that could be of benefit to you.

Please don’t delay your decision to reach out longer than you need to. As Income Protection policies can take several weeks to approve, waiting until March next year may be too late.

 

Disclaimer:
The information provided is general in nature. It has been prepared without taking into account any of your individual objectives, financial situation or needs. Before acting on this advice you should consider the appropriateness of the advice, having regard to your own objectives, financial situation and needs. This publication is prepared by IOOF for RI Advice Group Pty Ltd ABN 23 001 774 125 AFSL 238429 (‘Advice Licensee’). This publication is not available for distribution outside Australia and may not be passed on to any third person without the prior written consent of the Advice Licensees. The views expressed in this publication are solely those of the author; they are not reflective or indicative of the Advice Licensees position and are not to be attributed to the Advice Licensees. They cannot be reproduced in any form without the express written consent of the author.
webadmin No Comments

Developing better money habits

Developing better money habits

The cost of goods and services will always be on the rise

The increasing cost of goods and services is a reality most Australians have to deal with. Data from the Australian Bureau of Statistics shows that living expenses for employee households were up by 1.1% from March 2020, compared to March 20191. This may not seem like a lot, but if living expenses go up and wages stay stagnant, it makes an impact of your overall household income and expenses ratio.

 

As well as costing more, we generally want more, as we fill our homes with the latest gadget or upgraded model of a good and lean more on outsourced services to keep our homes and families running smoothly in an ever-changing world.

 

Knowing that the cost of things goes up simply mean you need to be more organised and create a priority list for yourself.

 

Cut back on major expenses

Trimming your expenses is one of the easier ways to manage the high cost of living. But rather than taking a piecemeal approach, it may be more effective to cut back on some of the largest drains on your earnings, such as food and transport costs. Keep track of what you spend on food and transport each month and then look at ways you can get savvier to make some savings.

 

Re-evaluate lifestyle costs

It may be worth auditing your lifestyle costs to see if you could decrease them. While you don’t have to give up all the things you enjoy, cutting down on, for example, overseas holidays, dining out or purchasing the latest gadget could go a long way in reducing your costs. Enjoying a few lifestyle luxuries is one thing, but don’t make a habit of it. Think about the fun you can have at home with friends and family or take advantage of free events, festivals and community services.

 

When you need new things such as clothes, furniture, white goods or a car, think about whether you can find them second-hand or upcycled. There are many websites and groups where you can find what you need, without needing to purchase it new.

 

Create a budget

Having a budget and sticking to it may help you minimise unnecessary expenses. A budget tracks your weekly or monthly spending and may help ensure you have enough money to cover essentials, build up your savings and handle unexpected or increased costs. You may wish to consider working with a professional financial adviser to create a budget that factors in your income, expenses and financial obligations.

 

Supplement your income

Increasing your income may be another way to manage the rising cost of living. You could take on extra work in your spare time or start a side business. For example, you could become a private tutor in your field of expertise, rent out your spare room or pet sit.

 

If you have enough savings on top of your contingency fund, you may want to invest to grow your capital and earn interest. Your financial adviser may recommend strategies to help you generate an income from your investments.

The high cost of living may affect your savings and lead to money-related stress. But if you’re smart about your finances, you could keep your cost of living in check and remain financially secure.

 

1467.0 – Selected Living Cost Indexes, Australia, Mar 2020 (https://www.abs.gov.au/ausstats/abs@.nsf/mf/6467.0)

Intergenerational Wealth

“Building sustainable wealth for generations”.
Phone: (03) 9326 1594 or (03) 9746 7643
Email: info@igwealth.com.au
This editorial and the information within, including tax, does not consider your personal circumstances and is general advice only. It has been prepared without taking into account any of your individual objectives, financial solutions or needs. Before acting on this information you should consider its appropriateness, having regard to your own objectives, financial situation and needs. You should read the relevant Product Disclosure Statements and seek personal advice from a qualified financial adviser. From time to time we may send you informative updates and details of the range of services we can provide. If you no longer want to receive this information please contact our office to opt out. The views expressed in this publication are solely those of the author; they are not reflective or indicative of Licensee’s position, and are not to be attributed to the Licensee. They cannot be reproduced in any form without the express written consent of the author. RI Advice Group Pty Limited ABN 23 001 774 125, AFSL 238429.
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“Little by Little becomes a Lot!”

Whilst in the middle of a pandemic, progress is still important. Intergenerational Wealth is pleased to announce we are in the process of building our new Head Office in Pascoe Vale. At this stage, our new office will be open in December, just in time for Christmas!
Intergenerational Wealth
“Building sustainable wealth for generations”.
Phone: (03) 9326 1594 or (03) 9746 7643
Email: info@igwealth.com.au
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HomeBuilder explained

HomeBuilder explained

Due to the Coronavirus pandemic, the Australian overnment made a number of announcements about relief packages to help Australians through this difficult period. The most recent relief package announcement was to introduce the HomeBuilder scheme in an effort to stimulate the building industry, creating jobs and economic growth, and for those lucky enough to be able to take advantage of this, providing the opportunity to build or renovate the home of your dreams.

What is the HomeBuilder scheme?

HomeBuilder provides eligible owner-occupiers (including first home buyers) with a grant of $25,000 to build a new home or substantially renovate an existing home. This is on top of any other State or Territory initiatives, such as stamp duty concessions and the Commonwealth’s First Home Loan Deposit Scheme and First Home Super Saver Scheme. This means you could double-up on benefits.

For some who may have lost their homes in the recent bushfires that ravaged homes particularly in New South Wales and Victoria, or have been trying to get into the property market, it is worth looking into the HomeBuilder scheme to determine whether you are eligible to take advantage of this one-off opportunity.

Who is eligible?

 

There are certain criteria you must meet, such as being a person (rather than a company or trust), are aged 18 years or older, and an Australian citizen. Other eligibility requirements include:

• meeting one of the following two income caps of $125,000 per annum for an individual applicant based on your 2018-19 tax return or later; or $200,000 per annum for a couple based on both 2018-19 tax returns or later

• entering into a building contract between 4 June 2020 and 31 December 2020. This contract must be to build a new home as your principal place of residence, where the property value does not exceed $750,000, or you must contract a builder to substantially renovate your existing home as your principal place of residence, where the renovation contract is between $150,000 and $750,000, and the value of your existing property does not exceed $1.5 million

• construction commencing within three months of the contract date.

Applying for HomeBuilder

You will be able to apply for HomeBuilder when the relevant State or Territory Government that you live in, or plan to live in, signs the National Partnership Agreement with the Commonwealth Government. When the States and Territories begin accepting HomeBuilder applications, they will backdate acceptance of these applications to 4 June 2020.

Other recent schemes to keep in mind

 

Relief packages to help small business survive and bounce-back from the Coronavirus pandemic include:

• JobKeeper payment – this measure will cease on 20 July 2020 for childcare services but continue for other eligible small businesses until 27 September 2020.

• the easing of restrictions – with the pandemic under control in some States, the Government has announced an easing of restrictions to allow many small businesses to open, albeit at a reduced capacity and with increased hygiene measures.

• a National COVID-19 Coordination Commission – has been established and they have developed a planning tool for small businesses to utilise in order to operate under conditions that keep them, their customers and their employees safe.

Talk to your financial adviser

Whilst you may be keen to jump straight into this offer, it is important to remember that in building or renovating, you are parting with a large sum of money, and most likely signing up to a large loan or mortgage.

As this is a big financial decision, talking to your financial adviser can help you work out how this fits into your overall financial plan.

Sources:
https://treasury.gov.au/sites/default/files/2020-06/Fact_sheet_HomeBuilder.pdf
https://www.pmc.gov.au/nccc/resources/planning-tool-help-businesses-reopen-andbe-covidsafe

Please note: inTouch and this editorial is of a general nature only and neither represents nor is intended to give specific advice on any particular matter. This publication does not contain tax advice and it is recommended that you speak with a tax specialist about your circumstances. We strongly suggest that no person should act specifically on the basis of information contained herein but should obtain appropriate professional advice on their own personal circumstances. The views expressed in this publication are solely those of the author; they are not reflective or indicative of RI Advice’s position and are not to be attributed to RI Advice. They cannot be reproduced in any form without the express written consent of the author. From time to time we may send you informative updates and details of the range of services we can provide. If you no longer want to receive this information please contact our office to opt out. Materials are published by RI Advice Group Pty Ltd. ABN 23 001 774 125 AFSL 238429. The information in this publication is current as of August 2020
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inTouch Magazine Q3 2020

inTouch Magazine Q3 2020

Welcome to our quarterly magazine –

in this edition:

• Working in retirement can be enjoyable
• An increase in scams targeting super
• Disconnect between markets and the economy: what’s going on?
• Tax tips and tax return checklist
• HomeBuilder explained
• Still working from home?

 

inTouch Q3 2020

Please note: inTouch and informtion in this editorial is of a general nature only and neither represents nor is intended to give specific advice on any particular matter. This publication does not contain tax advice and it is recommended that you speak with a tax specialist about your circumstances. We strongly suggest that no person should act specifically on the basis of information contained herein but should obtain appropriate professional advice on their own personal circumstances. The views expressed in this publication are solely those of the author; they are not reflective or indicative of RI Advice’s position and are not to be attributed to RI Advice. They cannot be reproduced in any form without the express written consent of the author. From time to time we may send you informative updates and details of the range of services we can provide. If you no longer want to receive this information please contact our office to opt out. Materials are published by RI Advice Group Pty Ltd. ABN 23 001 774 125 AFSL 238429. The information in this publication is current as of October 2019.
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