Nov172015
NewsRetirement Planning Age Pension During Retirement

Do You Want to Rely on Age Pension?

News, Retirement Planning

Age pension still exists to help those who need it, but the retirement planning professionals in our Perth office are dedicated to helping you secure a future in which you don’t have to rely on age pension.

Our Approach

The earlier one begins investing, the more money then can amass for their future. Sound investments make money due to the principle of compound interest. Compound interest is what happens when you reinvest interest that you made in previous years and make interest on your past interest.

As anyone who is paying attention to their home or auto loan knows, compound interest can add up to a lot of money. AMP Capital uses a simple example. If you make 15% interest on $1,000 in one year and reinvest it, the next year you are making interest on $1,150.*

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Nov32015
Mortgage BrokingNews Mortgage Broking and Financial Planning in Perth

Where do You Put Your Extra Money: Your Super or Your Mortgage?

Mortgage Broking, News

Because we offer both mortgage broking and financial planning to our Perth area clientele, we are in a unique position to answer a question that a lot of people have: is it better to put your extra money in your super or your mortgage?

Recently, this issue was discussed on news.com.au in an article called, “Weigh your super and mortgage to see where it’s best to put your money.” In the article, some industry experts were quoted about various strategies to figure out where to put your extra money. *

At Approved Financial Planners, we aren’t allowed to provide anything on this blog that constitutes or can be interpreted as “individual advice.” All advice has to be given on an individual basis. This is usually done in person, after we gather some basic information from you.

The article we described above is a perfect example of why advice is best given in person after becoming acquainted with your financial situation. The only thing the “experts” seemed to agree upon is that there isn’t any “silver bullet” answer.*

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Oct302015
NewsRetirement Planning Retirement Planning With Financial Advisors Perth

3 Crucial Retirement Decisions

News, Retirement Planning

If you are planning your retirement, a retirement planning professional can be a valuable ally. We have been a trusted name in Perth since 2005 and our financial advisors have more than 40 years combined experience in the industry. While we aren’t allowed to provide anything constituting individual financial advice in this blog, we would like to pass along three crucial decisions to be made before retirement, courtesy of the Financial Planning Association of Australia (FPA).

How Much Money Do You Want to Receive?

It is popular among many financial planners to recommend at least 75% of your pre-retirement income on a monthly basis when you retire. An easy example: if you currently make $80,000, you should plan to make $60,000 a month in retirement. You will be paying little or no taxes on this income compared to your time in the workforce and expenses related to work will disappear when you retire. *

According to the ASFA (Association of Superannuation Funds of Australia) Retirement Standard, couples should aim for $58,128 per year and singles $42,433 for a comfortable retirement. However, the FPA recommends that you create your own budget based on the lifestyle you want to live and then try to figure out where the money is going to come from.*

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Oct282015
Financial PlannersNews Standrads in Investment Property Home Loans

Loans Harder to Come By for Property Investors

Financial Planners, News

Financial advisors in Perth and across Australia are working even harder lately, thanks to the Australian Prudential Regulation Authority (APRA). In December 2014, the APRA announced that measures would be implemented to decrease the ratio of investment property home loans to owner-occupier home loans. *

The response for many lenders has been to make the standards for investment property home loans tougher, using tougher income tests and lower loan to valuation ratios. In addition, even though the Reserve Bank of Australia (RBA) cash interest rate is at an all time record low, most major banks are raising the interest rate for home loans on investment properties.*

Dr Shane Oliver, Chief Economist and Head of Investment Strategy for our parent company, AMP Capital, recently gave his opinion on what this means for the property markets and for small property investors. Here are some of the highlights.*

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Oct262015
Financial PlannersNewsWealth Protection Emergency Buffer Fund - Financial Planners Perth

How Large is Your Emergency Buffer Fund?

Financial Planners, News, Wealth Protection

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

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

Emergency Buffer Fund?

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

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

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Oct232015
Financial PlannersInvestment Planning Handling a Volatile Investment Market

Tips for Handling a Volatile Investment Market

Financial Planners, Investment Planning

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

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

Expect Volatility

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

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Oct212015
Mortgage BrokingNews Real Estate Investment Trusts Popular In Perth

Why Real Estate Investment Trusts are So Popular

Mortgage Broking, News

Some financial planning professionals in Perth are recommending real estate trusts as an investment vehicle. Recently, the Head of Listed Real Estate for AMP Capital, Mark Ferguson, wrote an article for the AMP Capital blog, called “Australian real estate investment trusts—the right time to invest?”*

The article referenced the fact that Australian Real Estate Investment Trusts (REITs) on the S&P/ASX 200 A-REIT list have delivered a three year return to investors of 18.4$ in the three years ending 31 July 2015. Past performance is not indicative of future performance. They listed four main reasons for investing in REITs.*

Strong Risk-Adjusted Returns

The REIT sector is now seen as a “defensive” investment that offers a high yield. They became popular as a defensive investment shortly after the Global Financial Crisis (GFC). Mr Ferguson expects the market to “be more discriminating,” making the highest quality property portfolios managed by the most conservative capital policies more popular.*

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Oct192015
Financial PlannersNews Teach Children To Save - Financial Planning Perth

Teaching Children a Lifetime of Good Financial Habits

Financial Planners, News

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

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

Budgeting, Spending and Saving: Crucial Skills

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

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Oct142015
NewsWealth Protection Start Protecting Your Hard-Earned Money

Is it Time to Start Protecting Your Hard-Earned Money?

News, Wealth Protection

Wealth protection is an important component for those planning their financial futures. We have helped many Perth residents do just that since 2005. When helping our clients save and produce income for their retirements, we see protecting that money as equally important. So do our friends at the Financial Planning Association of Australia (FPA), who recently wrote an article called “You’ve worked hard for the money, now it’s time to protect it.”*

According to the FPA, statistics indicate that Australians approaching retirement can expect to spend an average of 23 years between retiring and passing on. For some, their money could run out in as little as ten years, forcing them to rely on age pension as their sole source of income.*

According to the FPA, saving for retirement should be a “fundamental financial priority,” but so should protecting that income, especially for those in their “last few years in the workforce.” Many who are in their last few years of working aren’t as healthy as they were when they were younger and may not have enough sick leave to cover illness.*

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Oct92015
Financial Planners Active Asset Allocation Must Be Done Correctl

Why Active Asset Allocation Must Be Done Correctly

Financial Planners

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

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

Overview

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

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

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