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It has been a big month for Pursuit Advisers, as you will see below we have a few new members joining the team, as well as a few role changes within the business.
We are also pleased to announce the renovations to the office have been completed, which has primarily improved the layout of our interview rooms
Staff Promotion - Darren Adams - Director
On 1 July, Darren Adams was promoted to the position of director of the business.
Darren has been with the Business & Tax team since May 2013, starting as an accountant – and more recently working in the team management role of the organisation.
Darren has been a key driver behind our improvement in the use of technology to improve the services we offer.
Role Change - Micaela Thompson
From 1 August, you will no longer see Micaela at reception – as she will now be working with our Superannuation and Financial Planning teams as a client relations executive.
Micaela started with the business as a trainee receptionist, and during that time – has assisted every service line in the business whilst also undertaking the marketing role of our organisation.
Role Change - Danielle Bridger
Having worked in an internal bookkeeping capacity for the last 2 years, (in addition to working in a team administration role) – the natural change for Danielle was to focus her duties 100% in bookkeeping.
We are pleased to advise that Danielle now offers bookkeeping services to our Pursuit Advisers client base.
More information on the Pursuit Bookkeeping offer can be seen in the Business & Tax Update .
New Staff - Anthony Terlich
In July, we welcomed Anthony Terlich to the team.
Anthony is a CPA with over 12 years of experience in public practice.
Anthony joins the Business & Tax team in the role of senior accountant, and while he is originally from NSW – he assures us he is a fan of Aussie rules football.
New Staff - Maneisha Rogers-Trickey
We also welcomed Maneisha Rogers-Trickey to the Pursuit Advisers family.
Maneisha come's on board as our new trainee receptionist, replacing Micaela Thompson in the role.
Maneisha is excited to take on our "front of house" position, and will continue the friendly and professional approach you have come to expect when dealing with our firm.
New Staff - Megan Stoll
Last, but not least – we welcome Megan Stoll to the business.
Megan joins the Business & Tax team as a team administrator replacing Danielle Bridger in the role.
Megan will bring some great experience to the team, having recently finished working with the Australian Securities and Investment Commission while at the same time completing her Bachelor of Business at Federation University.
Left to right: Maneisha, Anthony and Megan
Departing Staff Member's
We also announce the departures of Edward Watt and Jessica White from the business.
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The Price MUST be Right.
One of the best lessons us advisers can remember from our Uni days was the lecture on pricing and how there is no correlation between how much business you do and how much money you make.
Let me share this lesson with you now and hopefully it will change the way you think about pricing your products and services and how you think about using your time.
Consider 2 cinemas each with a 40 seat capacity and an average attendance of 25 people per night at a charge $10 per ticket.
Cinema 1 thinks that if they can sell out the theater every night then they will make more money than Cinema 2 and therefore put them out of business. So they decrease their ticket prices to $4 per ticket.
This strategy does in fact bring in more business, their average attendance increases to 35 people per night and decreasing the average attendance at Cinema 2 to 15 people per night.
Now lets assume that extra income from food and drink sales are offset by extra wage and maintenance costs and focus on the earnings from ticket sales.
Ticket Sales 35 per night
Per Annum $51,100
Ticket Sales 15 per night
Per Annum $54,750
The eventual fate of Cinema 1 is that it will fail. Despite having more than double the attendance of its competitor it is making less money.
Don't let your business suffer the same fate as Cinema 1.
Some simple rules on pricing that can be learnt from this example:
1. Make your money
Ensure that your profit is taken into account when calculating your pricing. That is why you are in business!
2. Take increased costs to account
In this example, Cinema 1 will have increased staff costs to serve the patrons as well as increased maintenance costs and other overheads. If you find yourself only looking at increased income with no increased expenses, think again.
3. Economies of scale
Very important to remember. The reason why businesses like Bunnings, KMart and McDonalds can sell products so cheap is because they are so big that they can afford to purchase goods in such high quantities that they can negotiate lower prices and this is the reason why they can sell at low prices and still cover the overheads and make profits.
If you are quoting a job, or pricing goods that you sell, try and take as many cost and profit variables into account to ensure you maintain profitability. If it means that you lose the work, so be it. It is better to not work and make no money than to do work at a loss.
Feel free to give one our advisers a call to discuss how this relates to your business and how we can work with you in building a more sustainable plan for the future.
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Why You Need Income Protection
You can't underestimate the importance of peace of mind. It's easy to think your income is going to be a permanent fixture in your life – if you've got a stable job, why should you worry about losing your income, right?
Unfortunately, you can't predict the future. While we all feel invincible, accidents and illnesses can and will happen.
Below is a simple list of why it's important to have Income Protection insurance.
1. Income Protection guarantees ongoing quality of life
There's nothing better than having the assurance that your finances will be covered, no matter what happens to you. Income Protection gives you this guarantee: if you suffer a serious illness or injury, you will have financial protection that will keep you afloat until you can get back to work.
2. It provides peace of mind for you and your family
It's never easy to raise a family. If you find yourself incapacitated and unable to work, a loss of income can substantially impact on your family's finances. Thanks to Income Protection, you won't have to worry, your family can rest easy that you will all be cared for, regardless of the situation.
3. It allows you to keep up with repayments
When you're seriously ill or injured, the last thing you need is to worry about debts. It can be stressful to think about how you'll cover daily expenses, let alone pay off a mortgage, a car loan or credit cards.
5. Income Protection allows you to focus on recovery and recuperation
Many people at some point in their lives will find themselves needing some rest and recuperation from a serious illness or injury. But without the right protection, they may find themselves unable to put all their effort into getting better. Having to worry about funds is always stressful, not to mention your additional concerns about when you'll be able to return to work and begin earning money again.
6. It could happen to you!
For many, the biggest hope of their lives is to be able to have the consistent income to provide for themselves and their family well into old age. Unfortunately, not all of us will be able to see that dream come true.
Every year, around 55,000 Australians suffer a heart attack and an estimated 128,000 new cases of cancer are expected to be diagnosed, with that figure rising to 150,000 by 2020.
Do you really want to be caught out?
Guarantee your children, your partner, and yourself peace of mind and get a quote with us today.
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After the strong overall investment returns seen over last year, some slowing is likely in the year ahead.
Share markets are no longer universally cheap and the crowd is not as negative as a year ago.
However, putting short-term worries and uncertainties aside, with reasonable economic and profit growth, continuing relatively easy monetary policy and some asset classes still benefiting from a chase for yield, returns from a
well-diversified portfolio are likely to be reasonable this financial year – but more like 7% as opposed to 10%. Looking at the major asset classes:
• Cash and term deposit returns are likely to remain poor at around 2%.
Investors are still under pressure to decide what they really want: if it's complete capital stability then stick with cash or if it's a decent stable income flow then consider the alternatives with Australian shares and real assets such as unlisted commercial property likely to continue to offer more attractive yields than bank deposits.
• Still ultra-low sovereign bond yields and a likely gradual rising trend in yields, which will result in capital losses, are likely to result in another year of poor returns from bonds.
• Corporate debt should provide okay returns. A drift higher in sovereign bond yields is a mild drag but with continued modest global growth the risk of default should remain low.
• Unlisted commercial property and infrastructure are likely to benefit from the ongoing "search for yield" (although this may slow a bit) and solid economic growth.
• Residential property returns are likely to be mixed with Sydney and Melbourne slowing, Perth and Darwin bottoming and other cities providing modest gains. Very low rental yields are not good, particularly in oversupplied units.
• Expect a potential share market correction in the seasonally weak period out to October, but the rising trend in shares is likely to continue as shares are okay value, monetary conditions are likely to remain relatively easy
(albeit becoming less so) and continuing reasonable economic growth should help profits. We continue to favour global shares (particularly outside the US) over Australian shares.
• Finally, while the $A has proved far more resilient than I expected and may push up into the low $US0.80s in the short term, the downtrend in the $A is likely to resume at some point in the next 12 months enhancing the case for unhedged global shares.
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Although the Coalition government has made significant amendments to Australia's superannuation rules, many of the super policies did not change from July 2017.
For your convenience, we have split the 2017/2018 year superannuation checklist into 2 categories of super rules.
The first category is the super policies that remain unchanged from the previous financial year (that is, the super rules also applied for the 2016/2017 year and continue to apply in the future).
The second category is the substantial changes that took effect from 1 July 2017.
What major super rules have not changed, and continue to apply for the 2017/2018 year?
The key elements of the superannuation system that remain the same for the 2017/2018 financial year, include:
· Superannuation Guarantee (SG) rate at 9.5%
· Super fund investment earnings taxed at 15%
· Super benefits for over-60s remain tax-free
· Super benefits for under-60s still receive concessional tax treatment
· Work test for over-65s remains in place
· Low Income Superannuation Tax Offset (formerly LISC) continues
· Co-contribution scheme remains in place
· Tax treatment of death benefits is similar, in most cases (apart from the $1.6 million transfer balance pension cap and the removal of the anti-detriment payment option)
Significant July 2017 changes to the super rules (applicable from 2017/2018 year)
The significant super changes that took effect from 1 July 2017 are:
· Annual concessional (before-tax) contributions cap reduced to $25,000
· Annual non-concessional (after-tax) contributions cap reduced to $100,000
· A $1.6 million total superannuation balance cap restricting non-concessional contributions, co-contributions and spouse contributions
· Increase in income threshold for spouse superannuation contributions tax offset to $37,000 (and $40,000)
· Low Income Superannuation Tax Offset replaces LISC
· Introduction of a $1.6 million transfer balance cap
· Removal of tax exemption for transition-to-retirement pensions (TRIPs)
· Tax hike for more Australians: 30% tax on concessional (before-tax) super contributions
· Preservation age now at least 57 years
· Age Pension increases to at least 65.5 years
· SMSF trustees face bigger penalties from 2017/2018 year
· Introduction of First Home Super Saver Scheme
· Removal of option to treat a pension payment as a lump sum payment, for tax purposes
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Returning Staff Member – Niki Bryce
We are pleased to welcome back Niki Bryce from Maternity Leave. At this stage, Niki is only working on a casual basis, and is working in the background assisting us in getting all of our tax jobs completed by the end of the year.
A new Pursuit Baby!
We would also like to congratulate Stephanie and Matt Green (and big brother Harry) on the arrival of their baby boy – Cooper – who was born 19/4/2017.
We would like to announce that Pursuit Advisers has closed our Mortgage Broking division, and with this closure the departures of Dale Smith and Erin Kennedy.
Pursuit Lending started at the time our financial planning and accounting businesses merged, and over that time has assisted our clients to obtain equipment, business and home finance.
We would like to take this opportunity to thank Dale and Erin for the work they have done since joining our business, and wish them both luck for the future.
While we have closed this part of Pursuit Advisers, we are pleased to advise that we continue to hold great relationships with all of the Major banks, and can still assist clients with any finance they need to obtain.
Over the coming months, if you are visiting or near the office, you may hear the sound of construction coming from our building!
It's hard to believe we have been at 82 Smith Street for almost 2 years, and in that time, we have made use of the existing room structure as best as possible.
Over the coming months we will be making some small but significant changes to our interview rooms – making them larger and brighter for everybody's convenience.
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Taking year to date figures to estimate the likely tax position for the end of this financial year, we can influence this years result through strategies such as
· Bringing forward expenses,
· Small business depreciation rules,
· Making additional super contributions.
With changes coming to superannuation laws, a reducing corporate tax rate, the removal of the instant write off for assets under $20,000 and recently announced federal budget changes, now is the time to sit down and look at the best approaches to minimizing this years tax position as well as making any changes that will help in the long term.
Areas such as tax planning are where the advantages of cloud platforms such as Xero really stand out.
Rather than worrying about backing up, creating a copy and sending in your accounting software, we simply log in and print the reports we need before the meeting.
Having access to live data using a cloud based accounting software means less time for you in staying up to date meaning more time focusing on what is important.
Please feel free to contact our office if you have any questions about saving tax and taking the stress out of your bookkeeping.
Left to right:
Ben, Nicole, Rachel, Stuart and Aaron .
Ready to answer all your Xero questions.
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Every now and then you come across an article in the paper that reinforces how much of a difference trauma insurance can make.
Interestingly these articles are becoming more frequent and gaining more exposure.
An article appearing in the Herald Sun in March told a story of a 25 year old man who was told that he had just weeks to live.
Having experienced a constant cough for a number of weeks two Drs had diagnosed him with Bronchitis.
However after further investigations it was found that a 20 – 22cm tumour in his abdomen had grown so large that it caused his lung to collapse.
He was diagnosed with an aggressive type of non-Hodgkin lymphoma and after going through 20 rounds of chemotherapy, six weeks of radiation and a bone marrow transplant, the tumours, almost filling his torso, remained.
It had soon spread to his brain and liver and he was given less than a month to live.
Having almost given up hope, his mother asked the Dr if there was any drug that her son could take to save his life, regardless of the cost.
The Dr advised that he knew of a drug, however it would cost $6,000 per treatment as it would be prescribed for an illness that it had not been approved for.
Without the financial means to fund such a large expense a campaign began to raise the funds.
Fortunately due to the good will of family and strangers $50,000 was raised and the treatment could commence.
Amazingly after just two doses scans showed that he was in remission and having hoped that the tumours may have shrunk, they were shocked to find that they had disappeared.
This is a reminder of the importance of Critical illness / Trauma cover and how it can avoid the stress of having to raise money to afford the expensive cost of cancer drugs which are not covered by the PBS.
Although in this case the funds were raised, in such circumstances would you really want to have to rely on others to assured of being able to access the treatment?
Trauma cover provides an immediate lump sum upon diagnosis meaning that funds are available to get the best possible care from day one.
Something that could mean the difference between life and death.
Did you know that the premium for $100,000 of Life cover and $100,000 of Trauma cover for a 40 year old can be as low as $45 per month? Ask yourself this, would it be easier to put aside $45 per month.
Left: Jessy the 25 year old mentioned above with his parents Kathy and Tony Carroll
Picture: David Caird
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Act now before it's too late
If you are in your 60's, some serious consideration needs to be given as to how your retirement savings currently stack up.
Some questions that you should be asking yourself are:
· When do I want to retire or reduce my hours?
· Will I have enough money to do so?
· Am I taking full advantage of what is now in place to boost my retirement savings and ultimately the level of Income I will be able to generate?
· Am I aware of the changes that come into effect on the 1st July 2017 which could limit my ability to fully maximise my super savings?
A lot of people don't like to think too far ahead but when it comes to retirement and your finances, waiting until your already there can sometimes be too late.
There are many things that should be considered a number of years prior to turning 65 years of age.
As a client of Pursuit Advisers we would like to make you aware of the fact that you can meet with a Financial Planner to discuss your potential needs.
The first appointment is complimentary during which they will get an understanding of where you are now, where you want to be, and identify any shortfalls in the planning that is in place to help you get there.
With changes coming into effect on the 1st July this year, we encourage you to make an appointment as soon as possible. If you have any questions please call your adviser now.
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Spotlight on Superannuation Contributions
The rules relating to superannuation contributions are constantly changing, especially from 1 July 2017!
However, there are some constants which you should be aware of.
30 June is not the real deadline for contributions
If you were to ask me when is the latest date that you can make a contribution for a financial year, the short answer is 30 June.
However, this is a very dangerous answer to give. I think the practical answer should be 20 June. Why would I give you this answer you ask?
Consider, for example, the case of Liwszyc v Commissioner of Taxation  FCA 112. Mr Liwszyc was the sole director of a company.
On 30 June 2009 the bookkeeper of the company made two superannuation contributions in respect of Mr Liwszyc.
The payments were made via BPay. However, the superannuation fund (AMP Superannuation Trust) did not show the contributions as having been received until 1 July 2009.
Naturally, this meant the contributions were recognised in the 2010 financial year instead of the 2009 financial year.
This was despite Mr Liwszyc's evidence that the payments were clearly marked as being for the 2009 financial year.
Contributions are taken to have been received when the fund receives the money – not when it leaves your account – so depending on the way you are making your contribution, be aware of factors such as weekends and payment methods.
This case illustrates the dangers of leaving contributions to the last minute! Market value means market value at the point in time of the contribution.
The ATO and the government have been very worried in the past about people manipulating off-market transfers of listed securities to pick a date in the past that provides them with a lower capital gain outside of superannuation.
A few years ago, there was even a bill proposing to ban off-market transfers to superannuation.
Although the ban was never ultimately implemented, there is still a valid point: it is simply not allowable to pick a past date for a transfer.
The transfer occurs at the moment when the fund obtains a properly executed off-market share transfer in registrable form.
Members and trustees should not manipulate the market value by trying to choose a date in the past.
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New Staff member – Jessica White
Jess has recently moved to Victoria from Adelaide and joined our Financial Planning team in November this year. Jess will be working directly with Jamie Klason in a client relations role, having previously worked in various office roles in the mortgage broking sector, as well as mining and engineering.
As Jess had not worked in a country advisory firm before, Jess wanted to get to know more about the local dairy industry, and, showing she is a dedicated team member, recently learned how to milk cows – we thank Chris, Jan, Stuart and Belinda Griffin for allowing her to have this experience on their farm.
Asked about her time with the business so far, Jess responded "My role here at Pursuit requires me to learn about client investments and personal insurances to enable our clients the best for their futures but also how to protect their future which I think is great. The team here are enthusiastic and I have loved the daily interactions and communication between the Financial Planning, Lending and Accounting team it is great atmosphere to work in".
Welcome to the team Jess!
Right: Jess and her son
Ashton on a 4 - wheeler
Chris & Jan's dairy Farm.
Departing Staff Member – Stacey Whyte
We would like to thank Stacey Whyte for her contribution to Pursuit Advisers, as we wish her luck in the new role she is taking on outside of the business.
Stacey has been with the business since December 2014, working with our Financial Planning team in client relations and data management. During her time with Pursuit, Stacey has done fantastic work in ensuring that client data is up to date – not to mention making sure our recent change of sharebrokers has been as smooth as possible.
| Thank you Stacey!
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ASIC's Money Smart Financial Guide you can trust – Scams
Some of you may already be fully aware of the Government funded online platform known as MoneySmart, which is aimed at providing free and impartial finance guidance and tools we can trust.
It is full of useful advice, tips, tricks, tools and articles that can easily be accessed online at www.moneysmart.gov.au or via our Pursuit Advisers website at www.pursuitadvisers.com.au/resources/internet_links which contains a link to MoneySmart and many other useful Government and Industry based websites.
We must admit, in the past our government has been quite poor in providing a free, independent platform for the general public to access to help consumers become educated on money, budgeting, borrowing, insurance, superannuation, scams, retirement & investing.
However, MoneySmart has changed our opinion on this – now if only they started teaching all this stuff as a compulsory subject in all our schools and universities. We know it's not cool, but it is practical, everyday stuff that all our children should be taught before adulthood.
Let's focus on scams, as most of you over the past couple of years would have received some sort of scam in the mail, on the email, text message or even over the phone.
Some of these are blatantly obvious, however, the scammers of our world are getting more clever and cunning by the day, and there are numerous scams going around that on first look appear quite legitimate, and can easily be confused for official correspondence from a Government agency such as ASIC or the Australian Tax Office, or your Bank, Telephone or Utilities provider.
We receive calls every single week from our clients, families and friends querying if something they have received (or been contacted about) from what appears to be the ATO, ASIC or some other reputable source, and on most occasions these are instead scams.
We are happy to field your enquiries, so please when you receive something that doesn't appear 110% for real, make sure you show extreme caution, as the consequences of opening an attachment or clicking through to a link on an email, or signing up to something that doesn't just sound right, could be significant.
And remember: scams and schemes do not just come via emails and text messages originating from some country on the other side of the world, but also from perceived upstanding professionals right here in Australia. Again, if you are told by someone at a barbie, school grounds, work site or the pub about some latest craze that is making them thousands of dollars a week or day, please tread carefully, there is a great chance they have actually been conned by some rouge professional to sign up to some sort of Ponzi or related scam.
We encourage those that have not already visited this site to do so whenever they can, and checkout it out. We interact with it quite regularly, so please feel free to give us a call or email to discuss anything you find on it that you would like to clarify or go into in more detail.
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Are stay at home parents undervalued?
More often than not when people consider the need for Personal Insurance (Life, TPD, Income Protection and Trauma), little consideration is given to the need to ensure that the stay at home mum or dad is appropriately covered.
Consider what would happen if the stay at home parent was to suffer a serious injury or illness that resulted in him/her being unable to care for the children for a lengthy period of time?
Could you afford to stop work to take care of them and be there whilst they undergo the necessary treatment? Or would you have to continue working and rely on someone else to do so?
Could you afford the medical bills that may pile up?
The reality is that for most of people the world "stops" for a period of time when a loved one becomes seriously ill. Ideally you would want to be there at the time when they would you most. To take them for treatment, to be there for the kids either during the day or before and after school when their world has been turned upside down.
A rule of thumb when determining appropriate levels of Trauma cover is to ensure that the household income is replaced for a period of at least 2 years and that some additional funds are provided for possible expenses. Two years may sound like a lengthy period of time however having dealt with a number of claims it is quite common for someone to take a considerable amount of time to get over a Cancer diagnosis and complete their course of treatment.
For as little as $80 per month (less than the cost of a cup of coffee a day) a non-smoker up to 40 years of age can be covered for $200,000 worth of Trauma insurance cover which pays a benefit upon the diagnosis of a number of serious conditions.
To discuss your Personal Insurance needs or to have your existing polices reviewed please call our office.
Not just lending advice
Whilst the role of the Mortgage Broker is to source the deal that best suits your financial needs, we at Pursuit Advisers look beyond finance to ensure future risks are mitigated.
Here is an example:
A couple are looking to purchase a family home and wish to make the purchase in joint names. One of the parties is self-employed and potentially could be sued for various reasons associated with their work. Whilst the risk of litigation is minimal and having insurance mitigates the risk, we referred this client to our Business & Tax team.
From the discussion with the Business & Tax staff member it was agreed to have the property ownership in the name of the party that wasn't self-employed, which places the family home at arm's length should any litigation take place in the future. This helps protect the family home which is one of the biggest investments you will ever make.
Does your bank manager offer this advice? It's our role to identify these types of risks and address them from the outset to ensure our clients are looked after in every way.
Farm's take note
Here at Pursuit Advisers we know the value of quality business planning and financial management, and how critical it is to your farm business goals.
A Farm Management Deposit (FMD) is an essential tool for farmers. It is designed to manage any fluctuations that may occur within cash flow, which gives farmers more flexibility to seize opportunities as they arise. An FMD allows farmers to set aside pre-tax income (up to the value of $800,000 per farmer) and draw down on it when needed most.
A reputable lender has launched an FMD Offset Account. The purpose of this FMD offset account is to allow primary producers to offset funds held in an FMD account against the balance of an eligible variable rate Term Loan, which may assist in reducing primary production business funding costs.
If you would like to discuss this further, please contact our Finance Broker Dale Smith on (03) 5623 3778 or email@example.com
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The investment world post Trump
Whilst we thought that the markets might react in a negative manner after the election win by Donald Trump we have been pleasantly surprised to see the markets move upward since his win.
Although there is much ground still to cover, with Trump only recently being inaugurated, the initial reaction on the world's share markets has seen positive with all major markets around the globe trading at significantly higher prices than before the U.S election.
The main reason for the buoyancy in markets tends to be Trump's strong stance on tax cuts for the American people together with billions of spending on Infrastructure. These two key initiatives lead to the American consumer having more money to spend (stimulating the economy) and more jobs as construction ramps up through the spend on buildings, dwellings, roads, rail, etc.
Concern of course does exist around how the Infrastructure spend can be funded given that taxation cuts will result in less revenue collection. However at this early stage investors seem happy with Trump's pro-business approach.
Needless to say there are many other aspects of Trump that are causing unrest, key social aspects like immigration, healthcare and other social reform. These things are largely ignored by financial markets but the rising of people will have a sentiment based effect on the market at times.
It is really a time to watch the U.S. closely and to be in a position to be able to react when needed, it is certainly a time to focus on income based investments that provide significant levels of liquidity.
If you believe your portfolio requires review in these areas please contact our Financial Planners to discuss in more detail.
Last quarter we looked at the governments changes to non-concessional contributions, however this time around the Super Reform package has passed and now we need to look at concessional contributions.
There have been two main changes to concessional contributions as part of the Super Reform package.
The concessional contribution cap has been reduced to a flat rate of $25,000 per annum rom 1 July 2017. Previously the cap was as high as $35,000 if you were aged 49 or over.
The 10% test has been removed for claiming a personal super contribution deduction. From 1 July 2017, people with more than 10% of their income coming from salary and wages will now be able to make contributions into super and claim a deduction in their personal tax return, up to the $25,000 cap.
The second of the above changes gives the ability to make pre-tax super contributions to members who are receiving most of their income in the form of salary or wages. Previously, unless an effective salary sacrifice program was available, these members could only make after tax super contributions.
If you would like to know more about making pre-tax (concessional) super contributions into your super fund or how the reduced contribution cap will affect you please contact our office for advice.
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Baw Baw Big Blokes BBQ
On Friday the 14th of October, the guys in the office attended the Baw Baw Big Blokes BBQ – which is a day organised to raise awareness of prostate cancer, as well as to raise money to donate to the Prostate Cancer Foundation of Australia and local hospitals.
Pursuit Advisers are proud to be a major sponsor of this event, having been involved in that capacity for the past 3 years.
The 660 guests at the event enjoyed a day of hospitality and entertainment, with keynote speaker and Victoria Cross recipient Corporal Mark Donaldson providing an account of his time in Afghanistan, with this year's event raising $175,000.
(from Left, Darren Adams,
Stuart Kendall, Mark Dunsmuir,
Ed Watt and Dale Smith)
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Business & Tax
Airbnb v Hilton
A couple of our Business & Tax team members recently attended Xerocon South 2016 which is marketed as the world's most beautiful & innovative conference for cloud accounting leaders.
For one of the team, he was finally convinced to encounter his very first Uber ride!!
Now let's quote our resident accountant: "It was unlike any car ride I had ever experienced. First of all - the app introduced me to my driver before he had even picked me up and he was able to pin point my location and because I knew the number plate of my ride, there was never any chance of missing my lift. Once inside, the car looked like an Armor All commercial with an intoxicating smell of air freshener, complete with complementary bottle of water and breath mints and the fare was more than fair!!"
Compare this to the taxi ride they encountered the day before:
- Where they had to roam the streets for 10 minutes looking for a taxi,
- By the time they were able to hail one they were half way home,
- Once inside the cab they were welcomed by the gentle aroma of body odour from a driver who looked nothing like this taxi licence picture,
- After the short journey to their destination they were then disparaged for having such a small fare and told to "walk next time".
The icing on the cake was the taxi drivers' refusal to accept EFTPOS payment for the trip. Luckily for the driver they could scrape the cost of the fare from their loose change.
What does the transport method of a couple of our team members while at Xerocon in Brisbane, or Airbnb for that fact, have to do with Business you might ask?
Well first came eBay, followed by Amazon, TripAdvisor and wotif.com - All online platforms most know of and have used & experienced, where they bring buyer and seller together to transact, and in most cases without even the need to meet!
We are now happy to take advice from a stranger (online rating websites, such as TripAdvisor), buy from strangers (eBay), get in cars with strangers (Uber) and now even stay at strangers houses (Airbnb) – scary I know, but this is the new world we now live in.
All these are mainstream examples of how the way we do business is changing and changing rapidly, and it's all being driven by technology and consumer endorsement. Even Facebook has been cashing in on the phenomenon, reporting revenues in excess of US$20B these past 12 months (yes billion!!).
Airbnb is likely to be a term the majority of us would have not been familiar with 12-18 months ago.
However, our team members at Xerocon South were fortunate to be given an insight into the Airbnb journey thus far, and the candid confession from presenter Rachel Botsman that her husband (a lawyer) stopped her from investing in Airbnb when it was just a start-up back in 2008!
Airbnb is now considered the most valuable (US$30B) hospitality company in the world, worth nearly US$7B more than the next: Hilton Worldwide. Crazy, especially when you consider Airbnb does not even own one room, let alone a suite of luxury hotels around the world like the Hilton does!!
Take what you like from this, but remember, no matter what you do: embrace technology, both personally and in business – anything is possible and can now be done on a global scale, all through a simple gadget called the Smart Phone – another invention that is less than a decade old.
Remember Nokia? And please don't become another Kodak!!
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Who knows where interest rates are heading? Is the next move up or down?
Making money out of your cash investments is now more challenging than ever with interest rates in Australia at record lows and we may not yet be at the lowest point. The Reserve Bank is balancing the needs of our economy against the need to stabilise the interest rate in Australia. Inflation numbers remain low putting increased pressure on the RBA to further reduce rates to stimulate spending, however they must consider that the largest economy in the world, the United States of America, is looking to raise rates in the near future. An increasing U.S. rate against a declining Australian rate could certainly see the Australian Currency come under significant pressure and this would have ramifications on business here in Australia.
One thing that is for sure is that our rates will remain abnormally low for an extended period as any increases will be slow and steady when that time comes. There are many alternatives to Cash and Term Deposit investments that can increase your returns, if you are interested in exploring what is available and the risks and benefits of these investments please speak to one of our Financial Advisers today.
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Planning on purchasing a new car??
Over the Christmas / New Year period many of our clients decide to purchase a new motor vehicle. Most caryards make more money out of the finance product they sell you then the actual car itself therefore it's important to make sure you are getting the best deal.
Comparing apples to apples
If you have received a finance quote from the car dealer we can provide a second quote to ensure you are getting the best deal.
Details we require are:
- Finance amount
- Term of the loan
At the end of the day it's about comparing the repayments on both quotes which will give you an accurate idea on the overall cost of the loan facility.
We can structure the finance to suit your cash flow. For example – with a Chattel Mortgage facility we can factor in a special repayment equivalent to the GST component of that vehicle to coincide with your ATO BAS refund.
We can offer a Balloon/residual payment at the end of the loan contract, this reduces your monthly commitment.
If you income is irregular we can structure the repayments around when you receive your income.
Pre – approval
If you are looking to purchase a vehicle we can have a facility pre-approved so you know finance is ready to go when you find a suitable car. This speeds up the settlement process enabling you to take delivery of the vehicle sooner rather than later.
Range of Lenders
We have a panel of different lenders we can utilise to give you the best deal. Some lenders specialise in loans to borrowers that own property, other lenders specialise in finance for older vehicles.
Contact us first or contact us last, either way contact us
We offer an obligation free service so utilise our Mortgage broker team to ensure you get the best deal and that the loan that structured to meet your financial needs.
We look forward to hearing from you soon!
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Protect your family's financial security in 2017
You've worked hard to build wealth for your family. Now make sure you protect it with the right insurance.
Most of us don't like thinking about the reasons we need insurance - like having an accident, getting a debilitating or life threatening illness, or worst of all, passing away suddenly. So we often avoid thinking about insurance altogether.
Unfortunately, this approach will do nothing to help your family, should life take an unlucky turn. That's why you should make 2017 (yes we are nearly there!!) the year to get your insurance in place if you haven't already, and protect the lifestyle you've worked so hard to attain for you and your family.
Here are three types of insurance you should consider:
Life and TPD insurance
Life insurance protects your family's future by paying them a lump sum if you pass away or you are diagnosed with a terminal illness - or become totally and permanently disabled.
To decide how much cover you need, think about the debts you have, for example – mortgage and credit card debt, how old your children are (if you have any) and the cost of their education, and the kind of lifestyle you'd like your family to have should the unexpected happen.
Did you know you can take out life insurance through your super? It's often cheaper, and because your premiums are paid through your fund, it won't affect your week-to-week income. However, you'll need to make sure that the cover through your super is going to be enough to meet your family's needs - and to check that you're getting the best deal.
Income protection insurance
Income Protection insurance, also known as salary continuance insurance, covers you if sickness or injury means you're temporarily unable work.
Generally, income protection covers around 75% of your wages, before tax. You can choose how long you want to receive it for (for example, for two years or up to age 65) and the waiting period before you receive it, which is usually one to three months.
Income protection covers you when workers compensation won't - for example if you get sick, or hurt yourself outside of work. It's also an essential protection for self-employed workers, who aren't eligible to receive workers compensation.
If you had to recover from a serious illness such as cancer or a heart attack, the last thing you would need is financial stress.
Trauma cover can help, with a lump sum payment if you are diagnosed with a serious medical condition (these conditions will be specified in your policy). You can use the money in any way you see fit, from covering medical expenses and living costs, to taking a holiday to recuperate.
Want to know more?
The best way you can secure your family's financial future is to have the right insurance. A financial adviser can help you make sure your insurance suits your lifestyle, so make it a new year's resolution to speak to Jamie Klason at Pursuit Advisers.
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New legislation and its effect on making superannuation contributions.
After facing backlash on their proposed $500,000 lifetime non-concessional contributions (NCC) cap the Government have recently announced that this cap will be changed.
Instead, the Government have proposed the following changes, effective from 1 July 2017:
- The NCC cap will be reduced to $100,000 per annum
- The 3 year bring forward rule would be reduced from $540,000 to $300,000 for those who have not fully used the cap by 1 July 2017
- No NCC will be able to be made for individuals with a superannuation balance exceeding $1.6 million
The timing of these changes provides an opportunity to contribute a significantly larger amount in the current financial year than will be allowed going forward.
Given that the rules do not change until 1 July 2017, if you have not already maximised your NCC cap, you could be eligible to still contribute $540,000 to your fund regardless of your superannuation balance. After 1 July 2017 this amount will reduce to $300,000.
If you had planned on making large contributions to superannuation in the future now is the time to act! Please speak to one of our financial planners today.
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Team Update - This month, we welcome 5 new staff to the Pursuit Advisers team;
Ben joins our Business & Tax team in the position of Intermediate Accountant and comes from a firm in the Eastern suburbs. Working in public practice for 6 years, Ben has a strong connection with small business – specialising in transport, building and construction.
Aaron is currently completing his final year of university at RMIT, where he is majoring in Accounting – and joins our Business & Tax team as a Cadet Accountant. Aaron will be also working with our Pursuit Super Division where he will be learning how to process self-managed superannuation funds.
Rachel is currently completing her final year of university at Monash University, where she is majoring in Accounting – and joins our Business & Tax team as a Cadet Accountant. Rachel will be focusing a lot of her attention on the salary and wage tax returns that come into our office.
Karly has recently joined Pursuit Advisers and will be studying a Certificate 3 in Business Administration. You will find Karly within the Financial Planning Division as first point of contact for our Clients.
Erin has just recently joined the Pursuit team in the Lending Division assisting our Mortgage Broker while studying Certificate 3 in Business Administration. Erin had spent the past 5 years working in the hospitality industry.
We are also pleased to report the safe arrival of Kade Cooper Meyer for our staff member Niki Bryce & her partner Clint Meyer. Niki will be taking some time off to take on her most challenging role yet – motherhood!
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"It won't happen to me, I'm too young"
So often when I discuss the need for Personal Insurance with clients the common response is "why would I need it, I'm too young". In fairness when I was younger I had similar thoughts myself. However having now provided Personal Insurance advice for over 10 years I've certainly come to realise that when it comes to serious illnesses, it doesn't matter how old, how fit or how healthy you are, it can happen to anyone.
A few weeks ago I had a client tell me how they had been diagnosed with Diabetes. A fit, healthy person in their 30s. "Luckily" it has been diagnosed very early, but it will still require day to day management for the rest of their life to ensure that it doesn't lead to serious complications. There will also be some substantial costs incurred for the rest of their life. An Insulin Pump for example is going to cost upwards of $10,000 and then there are the ongoing costs of having to consult specialists on a regular basis.
Fortunately, the client had the sense to take out some Trauma insurance cover whilst they were still relatively young and healthy. To their surprise I advised them that they could make a Partial claim against their Trauma policy which resulted in them receiving a benefit in the 10s of thousands of dollars. This will more than cover the cost of the Insulin Pump as well as provide some funds to assist with ongoing expenses. Should the condition become more severe, another claim could be made against the remainder of the benefit.
I was also saddened to hear in recent days of a local school aged child who is about to undergo treatment for a serious condition and the need to have a fund raiser to support the family. Now some may wonder what a sick child has to do with Trauma insurance cover? However speak to any client of mine who has come to see me about insurance and they will tell you how passionate I am about ensuring that parents are at least made aware of the Children's Trauma insurance option. This type of cover provides a lump sum benefit upon a child over the 2 years of age being diagnosed with one of many conditions. Just like adult cover, it's purpose is to provide a family with much needed funds at a time when it would be needed most.
The points below show the typical conditions that a Trauma insurance policy will cover. Unfortunately there is a fair chance that one of them could happen to anyone of us. Should you have any questions in regards to Trauma insurance cover or would like to obtain a quote, please call the office and we will be happy to speak to you,
| Full payment conditions include:
- Alzheimer's disease
- aortic surgery
- aplastic anaemia
- heart attack
- benign brain tumour
- heart valve surgery*
- benign tumour of the spine intensive care
- loss of independent existence
- loss of speech
- loss or paralysis of limb
- chronic kidney failure
- major head trauma
- chronic liver disease
- major organ transplant
- chronic lung disease
- medically acquired HIV
- cognitive loss
- meningitis and/or meningococcal disease
- motor neurone disease
- coronary artery by-pass surgery*
- multiple sclerosis
- muscular dystrophy
- occupationally acquired HIV
- severe diabetes
- open heart surgery
- severe osteoporosis
- out of hospital cardiac arrest
- severe rheumatoid arthritis*
- parkinson's disease
- systemic sclerosis
- primary pulmonary hypertension
- terminal illness
- severe burns triple
- vessel angioplasty*
|Partial payment conditions include:
- adult insulin dependent
- diabetes mellitus
- burns of limited extent
- minor heart attack
- carcinoma in situ (CIS)
- partial blindness
- chronic lymphocytic leukaemia
- partial deafness
- colostomy and/or ileostomy
- severe endometriosis
- critical care
- systemic lupus erythematosus
- (SLE) with lupus nephritis
- diagnosed benign tumour
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Technology is changing the way we do business
The world of IT is continue to go through rapid change, and there is no end in sight. All businesses are being impacted by this forever evolving platform – 10 years ago the iPhone didn't even exist and the "cloud" was a pie in the sky idea – and if you have not yet embraced technology and what it can do for your business, then please do so today.
Here at Pursuit Business & Tax we have invested considerable time and resources in ensuring we stay up to date with all the latest technology in the accounting and advisory industry, including the recommendation to use a cloud based accounting software package.
Our preferred package is Xero, however we are also expert in implementing and using Reckon Hosted and MYOB Live.
We have not only introduced Xero & Reckon Hosted to our business clients, but have also moved our internal business systems from the traditional desktop and server based products onto cloud based platforms.
Given the confidential nature of our business and the information we have been paramount in safeguarding all the information we store in file, both from a backup and security perspective.
Since we started our business, we have trialled numerous software provides and have successfully implemented the following cloud based solutions:
· Xero Practice Manager: Cloud Based Work Flow, CRM, Time Management and Tax Software
· Xero Accounting Software: Bookkeeping Solutions for Clients and Financial Statement Preparation
· Reckon Hosted & MYOB Live: Bookkeeping Solutions for Clients
· BOX: Secure Document Storage Solutions
· Practice Ignition: Proposal and Invoicing Platform
· Crunchboards: Business Forecasting, Budgeting & Analysis Tools
· Office365: Email and Calendar Management
Not only do these online software solutions integrate, they also allow our team to work from anywhere, anytime and have real-time data at their fingertips.
Implementation of the all the above and the move to a fully cloud based accounting business has not come without its fair share of headaches, sacrifices and hard work, and we would like to thank our dedicated team for everything they have done to make this happen.
We would also like to thank you, our clients, for the feedback (ongoing, ad-hoc and via our recent client survey) and patience while we have transformed our business into the "cloud". We appreciate your support now and look forward to working with you into the future.
Finally, if you want to know more about how technology can help you and your business, please give us a call
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The past financial year has been rather messy for investors with another long worry list, a bear market in most share markets and record low bond yields. However, returns for diversified investors were not disastrous and followed several strong years. More importantly there are nine reasons for optimism:
1. okay growth,
2. easier for longer monetary policy,
3. rising prospects for easier fiscal policy globally,
4. we may have seen the worst of the commodity bear market,
5. deflation risks are likely receding,
6. the global profit slump may be close to over,
7. share valuations are okay,
8. investors seem to be getting used to a falling Chinese Renminbi, and
9. there is still a lot of bearishness around.
The key things to keep an eye on over the year ahead are:
1. Global business condition PMIs – these currently point to constrained but okay growth,
2. Signs of European countries seeking to leave the Eurozone and investors demanding higher borrowing rates to lend to countries like Italy, seen to be at risk of leaving. Italian banks are also a risk worth keeping an eye on,
3. When/if the Fed starts to raise rates again later this year and the impact on the US dollar,
4. Chinese economic growth readings, and
5. Whether Australian non-mining activity keeps improving.
So expect investment returns to remain constrained and volatile but they are likely to be reasonable.
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Federal Election: the results are in – what could this mean for your super?
The votes are in, the Liberal-National Coalition has stayed in government however their budget and the superannuation reforms proposed are yet to pass. Luckily, the majority of the proposed reforms are not due to apply until the 2017/2018 financial year, however there is one change that must be considered now.
The $500,000 lifetime non-concessional contribution cap is yet to be legislated however given it takes effect from 7:30pm on 3 May 2016 (budget date) we need to assume it will pass.
What does this mean for you?
Previously, the non-concessional cap was set at $180,000 per year (or $540,000 for three years if you were aged under 65). The new lifetime cap of $500,000 takes into account all non-concessional super contributions made from 1 July 2007.
This means there is a good possibility you may have already reached or exceeded the $500,000 cap before budget date.
If this is the case, the ATO will take the view that you have used up your cap and the excess can remain in your super fund.
Any contributions made after budget date that exceed the cap will be required to be withdrawn from your super fund. If you choose not to withdraw the excess you will be subject to non-concessional contributions tax of 49%.
If you are planning on making any large non-concessional contributions to your super fund going forward, please contact us first so that we can ensure you won't exceed the lifetime cap.
If you are unsure of how much of your cap has already been used please contact us.
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Buying Property With a Loved One
Purchasing a property with a loved one can be a great way to enter to the property market, but taking on such a large financial responsibility with someone else does come with risks. These are some of the pros and cons to consider before you both sign your names on the contract.
PRO: Entering the property market earlier – or at all
Rising house prices, the need to save for a deposit and the risk of fluctuating interest rates can all make getting your foot in the home-ownership door very difficult. It may seem an impossible task at times, and it can take years before you're in a serious position to purchase. Buying property with a friend or family member means the dream of home ownership can be realised much sooner.
PRO: Buying where you want versus where you can afford
Sharing loan repayments with another person can be easier in terms of servicing the loan and may allow you to borrow more. It might mean the difference between buying that inner-city place you've always wanted and settling for a suburb you've never heard of. By pooling purchasing power you can find your ideal home, which otherwise might have been beyond your budget.
PRO: A burden shared is a burden halved
Buying a property with a friend or family member not only means costs are shared upfront, but also across the life of the loan. The proportion of costs taken on by each person in the arrangement will vary depending on individual circumstances, but as an example, each person might pay half the deposit, half the legal fees, half the monthly repayments, half the rates, half the utilities, and half the insurance.
CON: All care and all responsibility
Although you'll only need to pay an agreed percentage or amount of the monthly repayments while things are tracking as planned, the entire repayment may become your sole responsibility if your loved one suddenly can't make their monthly contribution. You are both liable to ensure the full loan repayment amount is paid when it falls due, for the term of the loan.
It's important to plan for the worst-case scenario: could you make the full monthly repayments if you had to? If your partner loses the ability to make their share of the repayments and you can't cover the full monthly amount, you may need to discuss your repayment arrangements with your lender.
CON: Restricted capacity to invest in more property
You may only be paying your part of the repayments each month, but if you wanted to apply for another loan you could be seen by the lender to be carrying the full risk of your joint loan. So if you decide you want to expand your property portfolio or take out a loan for a car, you might find you can't borrow as much as you thought.
CON: Life happens
While home ownership might be a great idea for you and your potential property partner right now, it's important to talk about what your goals are, both personally and for the property.
Do you both plan to live in the property? What happens if your partner wants to move out and rent out their room? What happens if they want to sell before you do? Will you be in a position to buy them out, and could you afford the costs of refinancing and possibly paying sizable loan fees and/or government fees and charges all over again? These are important questions to ask of each other, and yourself, as you consider making a joint investment.
It's wise to have things written down in a formal agreement before you actually buy a property; a property lawyer will be able to advise you on the best way to do this.
Buying a property with another person can reap great financial rewards, but it's important to have your eyes wide open and be as thorough as you can to ensure you're prepared for any scenario.
Speaking to an expert is crucial, at Pursuit Advisers we have all aspects of your purchase covered:
1. Mortgage Broker - To organise your Finance
2. Accountant - To advice you on the best structure and tax issues relating to owning property whether an Owner occupy or Investment situation
3. Financial Planners - To ensure you have adequate insurance cover such as Life, Income protection, trauma and disability
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This month, we welcome Edward Watt to the Business & Tax Team. Ed has been working as a business services accountant since 2013 at firms in Melbourne's Bayside region and Inner South Eastern Suburbs. He has experience working with high net worth individuals and small to medium sized businesses in several industries such as manufacturing, investment and retail. Ed is also a Xero Certified Adviser.
Ed will be replacing Steve Austen who moves on to take a position in a Management Accounting role with Saferoads. Steve has been with our business for over 2 and half years and we wish him well in the role change.
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As most people will be aware Treasurer Scott Morrison handed down his first Federal Budget - the Coalition Government's third, in early May.
The winners appeared to be low and middle income earners, unemployed youth and small business, and there are significant changes to superannuation.
Below is a brief summary of main points from the Budget. Should you have any questions or are concerned about how the proposed changes may impact upon you please call your adviser.
Important to Note: These changes are proposals only and may or may not be made law.
- A lifetime cap on non-concessional (after-tax) superannuation contributions of $500,000 will apply from 7.30pm on 3 May 2016.
- The income tax threshold at which the 37% tax applies will increase to $87,000 pa on 1 July 2016, from the current $80,000 pa.
The tax rate that applies to small business companies will reduce to 27.5% for businesses with a turnover up to $10 million in 2016/17. Further tax concessions will apply in future financial years.
A range of superannuation measures will also apply from 1 July 2017.
- The annual cap on concessional (pre-tax) super contributions will reduce to $25,000, regardless of age.
- Concessional super contributions may exceed the annual cap if certain conditions are met.
- Those aged between 65 and 74 will be able to make super contributions regardless of whether they work or not.
- Tax deductions will be able to be claimed for personal contributions regardless of employment status.
- A lifetime limit of $1.6m will be placed on the amount of superannuation that can be transferred to start pensions.
Earnings on investments held in 'transition to retirement' pensions will be taxed at 15% (currently 0%).
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A recent newspaper article reinforced my belief that Trauma / Critical insurance cover is by far the least common type of Personal Insurance cover taken out by individuals and those with families. Yet arguably, it is the one type of insurance that we will most likely claim against.
The article stated that Research shows Cancer patients are experiencing significant out-of-pocket costs for their treatment at the same time as losing income at work.
Unfortunately, it also alluded to the fact that experts say people mistakenly believe our free public health system means people are protected when they get sick.
A recent study of nearly 270 cancer patients receiving treatment in NSW and Victorian hospitals found the majority were facing significant financial stress - whether they were on a high or low income before their diagnosis.
One in three said the cost of their medications was placing a significant financial burden on them, while about two thirds were either working less, or earning less, according to research presented at a Clinical Oncology Society of Australia conference.
For those who had lost money, on average their incomes had halved.
Few people realise that out-of-pocket costs came from things like co-payments or medications that had not been publicly subsidised yet.
As Financial Advisers our role is not only to assist clients with investing money, making money and saving money, it's also to ensure that their assets and lifestyles are protected in the event of something awful happening.
That is why I am so passionate about getting the message out there about Trauma insurance. It is my belief that everyone should at least be made aware of it and at least consider it.
Put simply it provides a lump sum benefit in the event of being diagnosed with not only Cancer but a number of other conditions including heart attack stroke and as highlighted by an article written by a client in our last newsletter, MND.
A lot of people say "I don't need this type of insurance". The fact is that many people do but believe that nothing bad will ever happen to them.
The other common comment is "we can't afford it". Although unfortunately for some this may be true, for most it's the unwillingness to prioritise the cost over other things.
For some reason we don't bat an eyelid when it comes to insuring our homes, our cars and our other prized possessions yet when it comes to our most important asset and by far the most valuable, we believe we're invincible.
Please, do yourself a favour. Call our office and get a quote, it may just be the most important phone call you ever make .
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Five steps to faster payment
Cashflow is king for small business. You feel it when payments are late. Yet up to 40 percent of invoices are overdue by a month or more.
Here are five things you can do to help get faster payment.
1. Review and adjust your payment terms and pricing
As a business owner, you might have set your payment terms based on what others do in your industry. Often these payment terms are based on tradition – invoice at the end of the month and allow 30 days to pay. But you can tweak this to get faster payment. Things to consider are:
How long do you give customers to pay you? Could you shorten that period?
How long do your customers actually take to pay you?
Could you offer an early payment discount?
For consistently late payers, you could change their payment terms. For example 50 percent deposit, cash on delivery, or late payment penalties.
It's also a good idea to check your pricing – things might have moved on since you last reviewed what you charge. Have your supplier costs such as goods, services or distribution increased? Is your profit where you expect it to be?
If you're putting off reviewing your payments and pricing, this might be a task to give to an expert advisor. It's vital that someone does it – even if that someone isn't you.
2. Get insight and data about who you're doing business with
3. Get expert assistance
4. Make your money work for you
5. Give your customers more ways to pay
Faster payment is a realistic expectation.
Giving customers a month to pay bills made sense when everything was done by cheque. But digital transactions have been around for years now. Make sure your business takes advantage of all those tools to get faster payment.
For more information on points 2 to 5 listed above or further advice on improving your customer's payments and cashflow, please give us a call on 03 5623 3778.
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What to consider when buying a second property
Buying your own home remains the great Australian dream – and purchasing a second property may help you take your wealth further. Whether you're building your property investment portfolio, buying a holiday house or supporting a family member, there are plenty of things to think about before you take that next step.
Consider your cashflow
Property tends to be a long-term investment, so do your sums to make sure you can afford the ongoing repayments on two mortgages. Also think about any major life changes on the horizon. For example, you may be planning to expand your family, or you might need to support a parent in the coming years.
Get to know the market and location
Research what's happening in the current market and whether it's the right time for you to buy. Get to know the area you're considering by speaking to local residents and real estate agents. It's also wise to look into the short and long-term planning for the area. For example, nearby construction may affect your ability to find a tenant.
Investigate before you invest
If you're buying a property as an investment, carefully consider its location. Buying in a high demand area is likely to see you enjoy a constant flow of income from the rent.
You'll need to provide your lender with a rental estimate letter, which you can get from the agent managing the property. Keep in mind that generally lenders only take 50–80% of the rental income into account when calculating whether you can afford the loan.
Choose the right mortgage
The amount you can borrow and the type of loan you choose will depend on various factors, including the equity in your current home, your income and expenses, and your property valuation. It helps to get quality advice on the right mortgage for you, along with other considerations such as negative gearing, and how to structure your loan to maximise tax effectiveness.
Whatever your reason for considering a second property, being well-informed will ensure a smoother purchasing process and a financially secure future.
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The ATO has released its latest statistics on the SMSF sector with the publication of the annual Statistical Overview 2013-14 and the September 2015 edition of the quarterly SMSF Statistical Report.
Some highlights from the report include:
- SMSFs account for 99.5 per cent of all superannuation funds and 29 per cent of the $2 trillion in total superannuation assets in Australia.
- Between the years ended 30 June 2011 and 30 June 2015, the number of SMSFs grew from 440,000 to 557,000, or average of 36,000 new funds added each year.
- Of SMSFs established in the last 10 years to 2014, 90% are still in existence.
- Estimated return on assets was 9.8% for 2013-14, the 5th consecutive year of positive returns for SMSFs.
- Top 5 assets make up 84% of all SMSF assets, 32% in equity and 27% in cash and term deposit.
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Christmas at Pursuit
The festive season at Pursuit Advisers was celebrated with a party in the park after work on Friday 18 December. Even though the weather was close to 40 degrees, fun was had by everyone, including a visit from Santa for the kiddies and lovely baked spuds for all to enjoy.
On the final day in the office, the team participated in a Kris Kringle, where everyone ended up dressed in Christmas costumes, before enjoying a late lunch and some drinks at a local restaurant. It was great chance for every-one to unwind after what was a big year for the Pursuit team.
Our last day in December marked the final day at Pursuit Advisers for Chelsea Lieshout, who after three and bit years with us, has decided to make the move to the City. We wish Chelsea all the best for the future and thank her for everything she contributed to our business – Chelsea was our first employee in the Business & Tax Team, back in July 2012.
On a brighter note, in December, we welcomed Dani Russell to the team.
Dani is 24 years old, lives in Warragul, and joins the team in the role of Team Administrator for the Business & Tax team.
Already, in her short time with us, Dani has fitted into the team nicely, and with her previous experience in the accounting industry, Dani brings fresh ideas to the table that will help continually improve our business and client service.
Welcome to the Team Dani Russell.
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Have you heard about FundWeb?
FundWeb is Pursuit Advisers personal client portal for your self-managed super fund.
When using FundWeb you'll have the ability to see how your fund is performing at any point during the year. It's a great way to see how your super is growing throughout the year rather than waiting until tax time.
Your listed investment valuations are updated daily and we will process your fund transactions on a minimum of a weekly basis meaning you will have up-to-date information available at your fingertips.
Through this portal you will also be able to view all your bank account transactions in the one place without needing to log in to multiple websites.
FundWeb also provides access through an iPad app giving you quick, easy and mobile login whenever you need it.
If you are interested in having access to FundWeb, contact your adviser to organise your personal login today.
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Car Buyers Beware
We have had a several clients contacting us after obtaining quotes for finance from car dealers to purchase new cars. In one instance we found that the car dealer quote for finance was over $6000 dearer than that provided by Pursuit Lending. In another quote the car dealer was cheaper than what we could offer. Part of our service that we offer at Pursuit Lending is an obligation free quote for Equipment Finance and we urge you to contact us for any type of transaction you are considering. It's important that we compare apples to apples and it's about com-paring the overall repayments rather than an interest rate quoted.
Home Loan Health Checks
This time of year you will be receiving your six monthly home loan statement in the mail and it may be time to consider your options.
Things to consider are:
- Does your current home loan suit your needs?
- Fixed or variable interest rates?
- Do you want to utilise your equity in your home for investment use?
- Do you want to reduce your repayments and consolidated debts such as credit cards or car loans?
At Pursuit Lending we offer a free home loan health check and have the access to all types of Home loans to assist in meeting your financial goals.
Did You Know?
We can assist in you in helping your children purchase their first home by utilising a family guarantee over your home to provide the equity needed for them to purchase a house. The Family guarantee is limited reducing the risk to you and eliminating the cost of Mortgage Insurance charged by the Banks where limited deposit is available. Talk to today to Pursuit Lending.
Contact our Lending Consultant, Dale Smith on 0439757995
or email firstname.lastname@example.org
Dale Smith is a credit representative (479787) of BLSSA Pty Ltd ACN 117 651 760 (Australian Credit Licence 391237).
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All businesses should have a website, but the days of just building a website and leaving it be are gone – you need to continually focus on attracting people to your website and updating its content. One of the most cost effective methods to do this is using Search Engine Optimisation (SEO)
WHAT IS SEO AND WHY IS IT IMPORTANT?
Search engines, such as Google are a popular tool used by pretty much everyone to find things they want on the web, including your website.
What does SEO mean?
In simple terms, search engine optimisation means 'making it easy for search engines to find your website'. The goal of the process is to get traffic to your website, from search engines, without paying for advertising. The higher your website appears on a search results page (known as a "SERP"), the more visitors it is likely to get.
To succeed at search engine optimisation, everything that makes up your site should be written or labelled in a way that search engines can understand. Your site is made up of many elements, including the content and images on the page and the code behind it – all of which search engines consider.
This process is known as 'organic', 'natural', or 'unpaid' search marketing (as opposed to paid search).
In other words, if you want anyone to find your website without paying for advertising, your success depends on SEO.
How does SEO work?
There are many factors that search engines take into account. Google has previously revealed that their algorithm assesses roughly 200 variables. Some of the basic ways to maintain a website that appeals to both users and search engines include:
• making sure you use relevant, descriptive keywords for your titles, copy, URLs, and images
• having fresh, relevant information on your site
• creating content that other people want to share and link back to.
Make sure you're using SEO correctly
There are penalties in place for websites who employ unethical, "black hat" SEO practices such as keyword stuffing or spamming. Google can actually recognise these methods, and will penalise the guilty website by pushing them further down the rankings than they would have been otherwise. This is another reason it's im-portant to talk to an expert about SEO for your website, as they can help steer you in the right direction.
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Figured is a cloud-based livestock and crop reporting and budgeting tool that works hand-in-hand with Xero to help farmers improve farm performance and profits. A Xero Farming Partner,
Figured uses the power of the cloud to provide one set of real-time financial in-formation to the whole farming team - the farmer, the accountant, the banker and the farm consultant. Figured and Xero bring stock reconciliation, cash flow, forecast profit and loss, balance sheet movements, formal accounts and tax statements together on the same platform, making it easy to collaborate, wherever you're working.
For more information visit www.figured.com
Or contact Stuart at our office on 5623 3778 or via email at email@example.com
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"My name is Dean. Both my wife & I took out Personal Accident, Trauma, and Income Protection Insurance when we started our business back in 2004. We had 2 young children at the time, and only recently purchased our first home, so we thought it best to look in to it.
Jamie Klason took the time to help us out, seeing what level of cover we would need, the whole time thinking we would never need any of this, and that we would simply be forking out money each month for nothing, for something that in reality would never happen, because of course we would live happy, healthy, and forever.
Recently I was diagnosed with Motor Neuron Disease (MND or ALS). This is a terminal illness, in which average life expectancy is 2-5 years from diagnosis. MND is the name given to a group of diseases in which the nerve cells - neurones - controlling the muscles that enable us to move around, speak, breathe and swallow, fail to work normally. With no nerves to activate them, muscles gradually weaken and waste.
Upon diagnosis Jamie has helped us out over and beyond what we expected. Sympathetic, empathetic, and just plain nice throughout the insurance claims process, and since with any questions we have.
With the Trauma cover we were able to wipe our mortgage, thus freeing up disposable income to en-able to us to do things as a family whilst we can. My Income Protection Insurance has kicked in. Whilst it isn't as much as I was earning, without a mortgage to worry about, it covers all our living expenses, and we can carry on as we did before.
With all this in place, and my Superannuation policy there, with a death policy included in it, I know that after I'm gone my wife and kids will be fine financially. Pursuit Advisers will be able to assist with financial advice on how best to invest my superannuation & death policy to ensure my family is fine when I'm gone.
So, off to live life to the fullest, and enjoy every moment I have, leaving my family with lots of memories. Live life like you will get hit by a bus tomorrow. It happened to me, all be it a slow moving bus."
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The 2015 calendar year was a challenging year for the Australian Share market.
Early in 2015 the market rose sharply with the Australian All Ordinaries Index increasing by more than 10% during the first quarter. Then it was almost in free fall for the rest of the year, ending the year at just under 1% lower than it started the year.
The numbers we are quoting are exclusive of dividends paid by the companies, they represent the movement in prices only. The average market dividend is said to be around 5% so this means that the average Australian share investor return for the 2015 calendar year is 4% after the negative price movement. This is a better return than bank interest but certainly not in the realms of 10% which is the historical long term average share market return.
At Pursuit Advisers we are focussed on income and for share investors this means dividends. We are pleased that our portfolios average dividend returns closer to 6.5% and therefore the investment philosophy that we use has returned 1.5% more to our clients than market averages in 2015 - via the increase in dividends received.
The 2016 year has not started well with prices heading down from the open and we see volatility continuing for some time. Dividends and an income focussed investment philosophy are more important than ever and this is our main focus heading into the rest of 2016. This is not another Global Financial Crisis the factors effecting the market are different and the risks are different.
Investors need to hold their shares, and their nerves, it is not time to sell shares now.
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Welcome baby Harlow
Paul and Cheryle-Leigh, along with Sapphire and Charlie, have welcomed a new addition to their family, Harlow Millie Pratt born 14th August 2015.
Welcome baby Ocklan
Cameron and Dee have welcomed a new addition to their family, Ocklan Ethan Whyte born 25th August 2015.
A Big Congratulations to Stuart Kendall who married the lovely Julia in September. The sun was definitely shining for these newlyweds in the picturesque country side at the Ripplebrook Cottages as they said "I do".
2015 Baw Baw Big Blokes BBQ
Pursuit Advisers are proud to be a Major Sponsor of the 2015 Baw Baw Big Blokes BBQ. This annual event is held to raise much needed awareness and Funds for Prostate cancer. Pursuit Advisers were able to raise in excess of $3,000 for this great cause.
Have you spoken to Dale yet?
After joining Pursuit Advisers in September, Dale Smith has been working hard in our lending division to help our clients find the best finance and loan solutions. As a qualified Mortgage Broker who has worked within banking and finance institutions in a range of client service roles, Dale is here to help.
If you need a loan to purchase; a vehicle, business equipment, a home, a commercial property, or an investment property then please contact our office for a chat with Dale. He is also available to review your existing loans to ensure they are competitive and best for your needs.
It's beginning to look a lot like Christmas
With Christmas just around the corner (believe it or not), we would like to take this opportunity to let you know of our business hours over the Holiday Season. Our office will close at 5pm on Tuesday 22nd December and will be re-opening at 9am on Monday 4th January.
Pursuit Advisers is warning the public to be aware of a phone scam that is again circulating where fraudsters are intimidating people into paying a fake tax debt over the phone. The aggressive scam attempts to force people to pay a fake tax debt over the phone by threatening arrest if they don't comply. Generally the Australian Taxation Office will send an SMS or letter to remind you that a payment is due. If the ATO don't get a response from this, they would then likely call to discuss a payment arrangement, whereas scammers will generally act in a threatening manner in a phone call – we have heard of examples where they advise that the client has a court case against them and are about to go to jail. If people receive a call from the ATO and are concerned about providing their personal information over the phone, they should ask for the caller's name and phone them back through the ATO's switchboard on 13 28 69. If people think they may have fallen victim to a phone scam, contact the ATO on 13 28 61 (8.00am–6.00pm, Monday to Friday).
It is time to have your Home loan reviewed and ensure your needs are matched with the best lending product.
Interest Rate Options
Variable – Great rates and a big variety Self-Managed Superannuation
Fixed – Fixed terms between 1 – 15 years
Split – Combination of variable and fixed
100% Offset Accounts -smart way of reducing your interest
Discount on your interest rates both fixed and variable
Fee free transaction accounts
Credit Card annual fee waived
Lenders are competing for your business with offers such as:
Cash backs offers
Interest rate discounts for the life of the loan
250,000 Velocity Frequent Flyer points
At Pursuit Lending we do the leg work for you. We analyse your current and future needs and select the product that best suits you. We deal with the Lenders on your behalf and the best thing is we don't charge you for the service as the Lenders will pay us for your services.
Contact our Lending Consultant, Dale Smith on 0439757995 or email firstname.lastname@example.org
Are you interested in learning more about Self Managed Super Funds (SMSF)? Do you have a SMSF and need some strategic or investment advice?
Our Super and Financial Planning divisions specialise in providing advice to SMSF clients so if you need some assistance please contact our office.
Turn down the noise.
Whilst it is easy to say "it's only a paper loss until you sell it" in reality when there is a downturn in the market people panic and with news headlines like "super funds lose billions" who could blame them.
However in reality, to be invested in shares in the first place, you should have time on your side to ride it out. As those who are dealing with a Financial Planner would be aware, we always look to ensure that a minimum of 5 year's worth of living expenses and known capital expenditure is put aside in defensive type assets to make sure that we don't have to sell when prices are low.
Therefore once you have worked out a strategy that is right for you, it's important to 'turn down the noise' on the information flow surrounding investment markets. We are now seeing an explosion in the volume and ease of access to information and opinions surrounding economies, investment markets and individual investments. This is great in a way but there is little evidence that it's helping investors make better decisions and hence earn better returns. We seem to lurch from worrying about one crisis to another.
Just like every year now it seems, this year is seeing the usual long list with worries about soft US growth earlier this year, Fed tightening, Greece, China, Korean tensions, the emerging world, US budget funding, etc. And as "bad news sells" the negative commentary around this noise gets the loudest airing. The "perma bears" have had a field day since the GFC in simply rolling their predictions of global meltdown from the US (which was supposed to have a debt driven or hyperinflation meltdown), to Europe (where the Euro was supposed to blow itself apart) to now China. The combination of too much information has turned investing into a daily soap opera – as we go from worrying about one thing after another. This is all leading to heightened uncertainty and shorter investment horizons which in turn can add to the risk that you can be thrown off well thought out investment strategies. The key is to turn down the volume on all the noise. This also involves keeping your investment strategy relatively simple – lots of time can be wasted on fretting over individual shares or managed funds – which is just a distraction from making sure you have the right asset mix as it's your asset allocation that will mainly drive the return you will get.
Since our most recent newsletter in February this year, we have made the big move into our new premises at 82 Smith Street Warragul (old Clark First National premises) and as part of this move we have welcomed a few more local people into our team.
Firstly, Stuart Kendall joined the Business & Tax team in March as an accountant. Stuart has worked in the accounting industry for the past few years and is currently studying to become a CPA. Stuart is a local, and plays football and cricket on the weekends, and is getting married later in the year.
If you have phoned or called into our office recently, you are more than likely to have met our new receptionist. Micaela is now in charge of our front of house at Warragul and will be working closely with our existing admin team to bring the best service to you, our clients. So don't worry, Mietta, Chelsea, Stacey and Danielle haven't gone anywhere, they are all still part of the Pursuit team!
Earlier in the year two of our existing Business and Tax team members decided to move closer to Melbourne but we have been fortunate enough to find some great people to fill our team, and in the last few weeks we have welcomed Jane Jinnette, Emily Hill and Nicole Gowans into our Business & Tax team. Jane is working with us a couple of days a week as a graduate accountant, while juggling family duties and studying her CPA. Emily also joins the team as a graduate accountant, and will commence her post graduate study once she returns from an extended overseas holiday later this year. Nicole joins the team as an intermediate accountant, and has recently returned home to be closer to her family after spending the past few years working in Western Australia.
The Australian Tax Office is currently experiencing some major disruptions in the wake of the new financial year. In years gone by, we have been able to access much of your information, such as group certificate, interest received, dividends and private health insurance fund details. Unfortunately, these reports are not available from the Australian Taxation Office just yet, and they have no confirmed date on when they will be!
What does this mean for you?
If you are meeting with one of our accountants in the next few weeks, please remember to bring details of the following:
- PAYG Payment Summaries (group Certificate)
- Interest on bank Accounts
- Record of payments received form the government
- Dividend details
- Details of any tax deductions
- Log book
- Private Health Insurance Fund statements
With access to so much information these days via the internet, consumers often spend numerous hours making decisions in regards to everyday purchases to ensure that they get the "best" service or product at the "best price". Sometimes it's for the sake of saving just a few dollars. However, when it comes to one of the most important financial decisions we will make in our lifetime, a home loan, we will often do the research in the beginning but then stick with the same product for the term of the loan. Most will argue that it is too hard, too time consuming or just too complicated to conduct a review every now and then to make sure that the loan we chose many years ago still remains the most appropriate today.
We all want to pay off our mortgage sooner and in turn save thousands of dollars. The secret is to ensure that we have the right loan with the right features and benefits to enable us to do so. Some of the things to consider:
- Is my interest rate competitive?
- Are the right discounts being applied based on my overall borrowings?
- Does my loan enable me to pay less interest by offsetting any savings that I may have?
- Can I make extra payments without penalties?
- Am I being charged unnecessary fees across my overall banking?
The good news is that we can take care of the "too hard", "too time consuming" and "too complicated" for you and it can be as simple as you providing us with a copy of your most recent home loan statement/s and some basic information. Our Mortgage Broker will then use this information to ensure that the loan that you chose some time ago does in fact remain the most appropriate for you today. If you would like to take advantage of this offer please call our office today.
Whether we like it or not we are all susceptible to ill health or accidents. It would be selfish of us to think "it won't happen to me" as I am sure that we all know good people who have suffered an unfortunate and often heartbreaking illness. As professional advisers we can often be guilty of taking the softly, softly approach when it comes to recommending personal insurance (life, Disability and Income Protection) cover. That is because people may see us as "salesmen". However, it is extremely important that you are aware of the fact that here at Pursuit Advisers we can take care of your entire Personal Insurance needs. In fact it is not only our aim but our obligation to ensure that all of our clients are adequately covered to prevent financial hardship if something bad was to happen.
As a client of Pursuit Advisers we encourage you to book a complimentary appointment with one of our Financial Advisers to discuss your personal or family needs. We can also take care of all your business requirements in terms of Key Man cover to ensure that your business will continue in the event of losing a Business Partner or key personnel.
Some of us will assume that it is too expensive or that it is too difficult to get based on having to get medicals, complete application forms etc., however in most instances it is not. For example medicals are typically only required when amounts applied for are in the millions of dollars. Regardless, sitting through a complimentary appointment to understand what is actually required as opposed to what we "think" is required is a small price to pay for the peace of mind that you or your family would be looked after. If you already have cover, that is great, however things do change and polices do get better so we would encourage you to have your cover reviewed to ensure that your premiums are still competitive and that your cover is still adequate. To book an appointment to see one of our Advisers please call our office today, it may just be the most important phone call you ever make.
You have heard it shouted from the rooftops – SuperStream has arrived – and if you are employed in a business with over 20 employees – compliance is a must!
Clients of Pursuit Advisers who use our Self-Managed Superannuation Fund (SMSF) service will need to notify their employer their SMSF's Electronic Service Address (ESA). Even if you are employed in a business with fewer than 20 employees you should provide this to your employer now.
The ESA for all Pursuit Advisers SMSF clients is – smsfdataflow
While the requirement to comply with SuperStream sit's squarely with the employer – it is in your best interests get them using your ESA immediately – as it will allow us to compare the amount your employer is required to pay against what they actually deposited into your account.
If you are invested in the share market then you will be very aware that it has been a volatile environment to invest in over the past few months.
After a stellar start to the year the Australian All Ordinaries Index had risen by approximately 10% from January through until April 2015. However this was followed by a negative performance in May, June and early July that at one stage saw that entire 10% return reduced to 0%. During these months there were a few things that caused the slump in prices; fear of interest rises in the United States was the first trigger, followed by the Greece debt default, and then lower than expected financial indication numbers from China. All of these things resulted in a large amount of uncertainty and a very volatile share market.
In mid-late July the issues in Greece were resolved and although it is a long term slog for the Greek economy before it becomes financially independent and stable, it removed the uncertainty surrounding the European Union and allowed the share markets around the world to restore some value as peace of mind replaced the uncertain thoughts of many investors. During this time the Australian All Ordinaries again rose and at the end of July the return for the 7 months ended 31 July was 5.45% - a very respectable return for the 7 month period it represents, especially when compared against cash and term deposit returns which are between 1-2% for the same 7 month period.
If you are someone who is unsure about share market investment or you are a share market investor who could benefit from some more education in this area then please contact our office. Our Financial Planners are well versed in the market and can assist you in all areas of investment choice.
Click the links below to view our range of archived newsletters.