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

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

Financial Planners Help Balance Present and Future Lifestyle

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

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

How We Help You Meet Your Goals

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

Whatever your situation, assess your goals, assets and expenses. Then we help you figure out when you want to retire and how much money you want to make when you retire. Once you have a firm retirement date and a figure, it’s simply a matter of making and executing a financial plan that is customised for your needs.

We can also provide advice for you right now on budgeting and getting the most out of your income. For most clients, we are able to strike that balance between having the “now” and the future they want.

Consult Our Financial Planners

To learn more or for an obligation-free consult, call us today: 08 6462 0888.

Can You Spot an Investment Before it Becomes a Trend?

If you happened upon this page, you are probably interested in investment planning and live somewhere in the Perth area. At Approved Financial Planners, we provide a full range of services such as financial planning and mortgage broking to our Perth area neighbours.

We are often asked what the “new trends” are regarding investing. While many investors like to jump on the newest trends, those who prosper the best are usually those who can spot investments before they become trends. If an investment is a trend, it often means that too many people have already “jumped in.”

Spot an Investment

Our parent company, AMP Capital, has identified what they believe will be an investment trend and a new asset class soon: global listed infrastructure.*

The Global Listed Infrastructure Team of AMP Capital is led by Tim Humphreys. Mr Humphreys holds a Bachelor of Engineering Degree with Honours from the University of Sheffield. He applies his knowledge of engineering to the financial field and is known as a skilled infrastructure analyst.*

Mr Humphreys is of the belief that one of the more effective ways to maximise investment income is to find what he refers to as a “hidden gem”: a solid investment that has not become a trend yet. Global listed infrastructure is a relatively new investment category, slightly less than ten years old. Mr Humphreys feels that global listed infrastructure is positioned similarly to where Real Estate Investment Trusts (REIT’s) were in the 1980’s.*

Many investors who “got in early” on REIT’s prospered greatly. Mr Humphreys feels that global listed infrastructure is a sound investment with the potential for growth similar to REIT’s.*

Call Approved Financial Planners

Global listed infrastructure might not be the best investment for everyone in the Perth market. We can’t really recommend it until you have an individual consult with one of our financial planners. To make an appointment or to learn more, call us today: 08 6462 0888.

*AMP Capital Insight Paper: May 2015. “Spotting an Investment Trend Before it Happens.”

Have You Set Your Financial Goals Yet?

One of the services we offer is called “investment planning.” When potential clients call our Perth office and ask for an individual consult, one of the first things we ask is “what are your investment goals?” Often, the answer is “I don’t have any investment goals.” This raises what we see as an obvious question: “How can you have an investment plan without investment goals?”

Remember that all information here is general. We cannot provide any individual advice on our blog. If you want advice, you will need to call us and arrange for a free consult. Here are three tips for getting it right.

Setting Financial Goals

Getting a Handle on Finances

Whenever we provide an individual consult, it always goes better if you have a handle on your finances. This means knowing how much money you have coming in every month, your assets, how much money going out every month and your debts. People who know this information tend to be more efficient at saving money, which can eventually be used for investments.

Setting Goals

Setting goals is the foundation of any plan. It is impossible to have a real financial plan without financial goals. These can run the gamut from short term goals, such as paying off a credit card, to long term goals, with the ultimate being retirement.

Your financial goals will determine the amount of money you need to make them happen. For example, when do you want to pay off your home mortgage? How about your car or truck? Will you be putting children through college? Do you want to keep your current home, buy a larger one or downsize? Do you want to travel?

All of these questions are important.

Calling Us for an Individual Consult

At Approved Financial Planners, we not only have a wealth of experience in serving the Perth area, but we now have the resources of AMP behind us. You can make us your “one stop shopping” outlet for financial planning, retirement planning, superannuation and mortgage broking, all from our Perth office.

To learn more, call 08 6462 0888 today.

7 Reasons Why the Chief Economist of AMP Capital is Optimistic about the Economy

As financial advisors in Perth, it is our job to know everything we can about the economy. At Approved Financial Planners, we spend a lot of time talking to clients and peers about minute details of events affecting the economy.

As you may have guessed, it hasn’t always been fun and games, starting with the end of the mining boom in WA. Even though the economy has been doing much better as of late, there is still no shortage of naysayers predicting doom and gloom for the Australian economy.

Optimistic About The Economy

Recently, Dr Shane Oliver, the Chief Economist of AMP Capital, our parent company, published a piece on the “Oliver’s Insights” section of the company blog called, “The Australian economy – seven reasons not to be too gloomy.” The piece provided contextual background for why the naysayers are so persistent, then gave seven reasons why the economy is in better shape than the naysayers think. We would like to provide a summary for you.*

Frustrated with Slow Growth?

While the March quarter showed a 0.9% growth in the Gross Domestic Product (GDP), annual growth is stuck at 2.3% where economists would rather see it between 3% and 3.25%. If one takes into consideration that net exports were responsible for 0.4% and inventories were responsible for 0.3%, domestic final demand was nearly flat for the March quarter and only 1.1% year to year.*

Home construction is up 9.2% year to year and consumer spending is up 2.6%, but consumer demand is in the red at -0.2% year to year and business investment is at -6.2% year to year, mostly due to the mining industry’s continuing contraction.*

But is it really that bad? Here are seven reasons to be optimistic.

Record Low Interest Rates

Four years ago, it would have cost roughly $750 more per month more to pay a home loan on $350,000. Those who rely on higher interest rates from their bank deposits are losing revenue, but the deficit between what Australians owe banks and what banks owe Australians is approximately $1.2 trillion. That means a lot more in low interest is benefiting consumers than hurting them. Better yet, much of the revenue not going towards interest is being cycled back into the economy.*

Rising Wealth Levels

For the year ending May 2015, housing prices are up 9%. Balanced growth superannuation funds are showing return rates of 14%. The Australian share market is providing returns of 10%. This all benefits spending.*

Petrol Prices Remain Low

Petrol prices are lower than at their peak. While they aren’t as low as they were at the beginning of the year, they are still not as high as they were. This helps households and businesses save money.*

Household Savings

The rate of household savings is currently at 8.3%. This can often support spending.*

Lower Australian Dollar ($A)

This may seem counterintuitive, but when the $A is worth less, it is a boon for market segments such as tourism, mining, farming, manufacturing, education and services. Our tourism and education exports took a bath when the $A was higher than parity, but both have reached record high levels since the $A has gone down. *

Export Volumes

Our export volumes are up 8.1% year on year. The main driver is more completed resource projects and the lower $A making the prices more competitive on the international market. The GDP’s account deficit share is at a 30 year record low. *

Boom Management

We managed the mining boom much better than previous generations managed other booms. Previous booms led to deficit blow-ours, runaway inflation or both. This created an imbalance where all market segments boomed together and subsequently busted together. During the mining boom, there was no imbalance. This has made the economy more stable in the wake of the mining contraction.*

Call Approved Financial Planners Today

Now that you know it isn’t all gloom and doom, call Approved Financial Planners for a free consult. It’s never too early to start planning your finances or your retirement.

Call 08 6462 0888 to learn more.

*AMP Capital, 3 June 2015, Oliver’s Insights. “The Australian economy–seven reasons not to be too gloomy.”

Is Your Super Working Hard Enough for You?

Have you checked your superannuation fund lately? Is it working hard enough for you? Ideally, everyone in Perth would answer those questions “yes.” However, the reality is that some people pay a lot of attention to their supers and some just stick with the fund their employer uses and hope it increases on “auto-pilot.”

If you are someone who keeps track and is happy with how your employer’s retail or corporate fund is performing, great.

Super Working Hard Enough for You

Superfund Basics

Currently, your employer is required to pay 9.5% of your income, not including overtime, to your superannuation fund. You are allowed to make contributions to the fund as well. Depending on the conditions of your employment, the money may go into a corporate fund chosen by your employer or a fund that you choose between a retail fund and an industry fund or a self managed super fund.

The super fund invests your money for you. All increases are reinvested for you and you make money off of the money the fund has already made. This is similar to “compounding interest.”

You are not allowed to access your money until you retire or you reach a specific age. By July 2024, that age will be 60. Then, you can choose to receive your super fund in payments or a lump sum.

Self Managed Superannuation Fund (SMSF)

An increasing number of Australians are choosing to manage their own super funds. This allows you to choose investment platforms and diversify however you like. However, an SMSF isn’t for everyone.

Call Approved Financial Planners Today

Choosing the super fund that is right for you involves a lot of factors. It is best to talk to an experienced financial advisor about your individual situation. We have more than 40 years of combined experience in providing financial planning and superannuation advice for clients in the Perth area. Call 08 6462 0888.

Why Superannuation Estate Planning is So Important

Estate planning is an important part of protecting your wealth and making sure that your surviving spouse and children have access to your superannuation fund. In Perth and beyond, it is reassuring to many to know that their families will be taken care of in the event of their death.

While the death benefit being paid to a surviving child under the age 18 or spouse can be tax-effective, there is more to superannuation estate planning. Vulnerable beneficiaries often need to be protected and funds need to be available to entities that are classified as “non-tax dependents.”*

Superannuation Estate Planning is So Important

What is a Testamentary Trust?

A testamentary trust is an arrangement or trust contained within a will and takes effect only after the person dies. It can be created using all or any part of the estate as assets. A will can contain many different testamentary trusts. A testamentary trust can allow for vulnerable beneficiaries to receive their funds while still preserving the tax efficiency for the spouse or children.*

What is a Testamentary Life Interest Trust?

A testamentary life interest trust is a trust that provides support to the named beneficiary for the rest of their life, starting immediately after the client’s death. If the beneficiary transcends the need for support, the money goes to other nominated beneficiaries directly. Life interest trusts do not allow the beneficiary to control the access to the funds that capitalise the trust.*

Benefits of a Testamentary Trust

Ideally, a testamentary trust is tax efficient. It also protects the assets of the trust while protecting the beneficiaries. It often provides the primary beneficiary with flexibility when trustees are allowed to decide when to release funds and how much to release.*

Call Approved Financial Planners Today

For estate planning, general financial planning or to learn more about how a testamentary trust might work for you, call our Perth office: 08 6462 0888 today.

*Financial Planning Magazine: “Essential Superannuation Estate Planning.”

Is Your Wealth Protection Plan Up to Date?

Wealth protection, also known as insurance, helps you protect yourself and your family. It helps you ensure financial security for yourself and your family in case something bad happens to you. We have been providing wealth protection and financial planning in the Perth area since 2005. We can’t provide individual advice without a consult, but here is an overview of how a solid wealth protection plan may protect you and your family.

Up To Date Wealth Protection Plan

The Four Basic Types of Insurance

There are four basic types of insurance cover: income protection, trauma cover, total and permanent disablement (TPD) and life insurance.

Income protection pays you up to 75% of your income in monthly payments during any period of time that you are unable to work because of injury or illness. This provides for your monthly expenses and keeps you and your family afloat while you are unable to work.

Trauma cover pays you a lump sum if you are diagnosed with a specific illness or medical condition outlined in the plan. Many plans also cover medical procedures such as bypass surgery. This allows you to focus on getting well instead of worrying about finances.

TPD pays you a lump sum if you become permanently disabled to a point where you are unable to work again. This can be specific to your current occupation or for any occupation.

Life insurance, or “death cover,” provides a lump sum to your family or other beneficiaries if you die. It is generally recommended that you have a life insurance policy that at least covers your mortgage so that your family doesn’t have to worry about losing their home.

Talk to the Experts

At Approved Financial Planners, we are experts at wealth protection. We can talk to you and help you determine what is most important and relevant to your financial situation. If you already have a wealth protection plan in place, we can help you make sure it provides the protection you and your family need.

Call 08 6462 0888 today.

Little-Known Research Paper Indicates that Financial Planning Provides Psychological Benefits

We have more than 40 years of combined experience in providing financial planning to the Perth area, but even we were surprised when we found a little-known research paper authored by Kym Irving from the Queensland Institute of Technology in 2012. The article was subsequently published by Australasian Accounting Business and Finance Journal in their special issue on Financial Planning.

According to Ms Irving, the traditional six-step process of financial planning not only impacts clients mechanically through results, but psychologically, too. One of the central themes of the article is that the physical reality of improved well-being also results in a better psychological sense of well-being. *

Financial Planning Provides Psychological Benefits

The Six-Step Process

The very nature of financial planning is that it helps individuals create a series of positive, goal-oriented outcomes by helping them manage their funds and ensuring that they meet their financial goals. Ms Irving used a six-step model of financial planning that included:*

  • Definition of the level or scope of engagement.*
  • Identification of the client’s goals.*
  • Accurate assessment of the client’s individual financial situation.*
  • Formulating the client’s financial plan.*
  • Executing the financial plan by acting on it.*
  • Evolving and revising the financial plan on a regular schedule and when life circumstances change.*

This six-step plan is systematic and goal-oriented. It gives clients an action plan to produce desired outcomes through appropriate allocation of funds. It produces specific strategies to ensure the desired outcomes and contains a system of checks and balances to monitor progress towards those goals.*

Ms Irving also noted that the field of financial planning has changed due to the many reforms that have taken place. Financial planning now includes taxation, superannuation, retirement planning, debt advice, estate planning, wealth creation and wealth protection strategies such as risk insurance and life insurance.*

The success rate of financial planning means that the clients are likely to attain positive outcomes which increase their life satisfaction and physical well-being. When the client produces more wealth, it tends to increase their access to satisfactory outcomes concerning their goals and their lifestyle.*

Planning the Financial Future

According to Ms Irving, financial planning involves activating a wide range of mechanisms that can have a positive effect on well-being. When one is planning for the future, it forces them to be more engaged with the tasks they perform on a daily basis. Engagement is now seen as a reliable indicator of increased well-being.*

In addition, the process of planning firm goals can provide a greater sense that one is in control, which is another indicator of well-being. Not only does planning provide a sense of control, it provides evidence that the client is both capable and competent at managing their life. Ms Irving refers to this as “environmental mastery.”*

When a person attains environmental mastery, they can control their everyday affairs and their environments to fulfil their personal needs and desires. They are able to process and control a complicated matrix of external events and take full advantage of opportunities for improvement of their lives. A feeling of environmental mastery has been linked to psychological benefits such as reduced depression, reduced anxiety, enhanced well being, enhanced life satisfaction and improved mental health.*

Setting Goals

According to Ms Irving, the effective setting and attainment of goals can add structure and purpose to life. Goals are the expression of one’s vision for the future and Ms Irving’s research indicates that they are important to helping our lives have meaning and viewing our lives as worthwhile.*

However, it is argued by many that some goals can be dysfunctional, especially if they involve accumulating “toys” or money in an effort to prove one’s worth. Functional goals, such as a secure future for one’s self and one’s spouse, tend to provide more increase in life satisfaction.*

Probably the most salient finding of Ms Irving’s research into the psychological benefits of having goals: they don’t even have to be attained to produce psychological benefits.

Call Approved Financial Planners Today

To learn more, call our Perth office today: 08 6462 0888.

*Kym Irving, 2012. Australasian Accounting Business and Finance Journal, Volume 6, Issue 4. “The Financial Life Well-Lived: Psychological Benefits of Financial Planning.”

Can You Track Your Spending for One Month?

If you work with a financial advisor in our Perth office, one of the first things you will probably be asked to do is to figure out your monthly expenses. There is also a pretty good chance that your financial planner will advise you to create a budget.

Track Your Spending for One Month

Knowing monthly income and expenses is one of the first steps to getting a handle on your financial situation. The better you are at this, the easier it is for a financial planner to provide you with your desired results.

Why Track Spending?

Usually, when someone tracks their spending accurately, it is a true eye-opener. They usually find a lot of surprises and have no idea they were spending so much money on entertainment or any of many other things. Accurate tracking allows you to see exactly what you are spending instead of guessing based on what you want to remember.

What to Do

Spending is easily tracked on your smartphone. Both iPhone and Android have plenty of apps to help you easily and accurately track every bit of money you spend. If you don’t like any of the apps, you can create a spreadsheet or just use a piece of paper.

You can create categories for spending, creating categories for transport, rent, utilities, food, beverage, entertainment and maintenance. You can also dig deeper into categories such as water, coffee, wine and others in the category for beverages.

The Intended Result

When you know exactly where your money is going, it is usually easier to create a more realistic budget. It can also show you places where you can save money. For example, if you are spending $200 a month on your morning or afternoon cuppa, you may decide to seek an alternate solution.

Call Approved Financial Planners

Remember that we can’t provide individual advice here: you need to talk to us in our Perth office. To learn more or for an individual consult, call Approved Financial Planners today: 08 6462 0888.

Too Busy to Invest? We can Help.

Financial advisors in Perth are nearly ubiquitous. There are seemingly so many financial planners around that we can get “placed on the back burner” by many. As a result, people who have worked hard to make a good amount of money may just be letting their money sit in bank accounts and making a minimal amount of passive income.

Our Process

At Approved Financial Planners, we make it easy for you to invest. We require an individual consultation and some basic information. We will assess your risk tolerance. When we have taken all of your individual factors into consideration, we will devise a financial plan that makes sense for you.

We will present that plan and with your permission, execute it for you. You spend minimal time and effort but are able to reap the benefits of our financial planning. After we know what you want, we can research investments for you and do all of the paperwork. That means all you have to do is sign the documents.

Too Busy to Invest? We can Help.

At Approved Financial Planners, we help minimise your market risk by diversifying your investment portfolio. We do check in on a regular basis so that we can adjust your investment strategy to fit your goals, current lifestyle and financial situation.

While we make it easy for you, remember that it is always you who has ultimate control over your investments. We are here to advise and put a program together for you, but you are always welcome to tell us if you are uncomfortable with any investment or if you are really interested in an opportunity we may not have mentioned to you.

If you want to start growing your money but think you don’t have the time, one of our financial advisors can help you.

Call Our Perth Office Today

For an individual consult, call Approved Financial Planners today. We can do the work behind the scenes and help you come up with an investment plan that requires minimal time and effort on your part: 08 6462 0888.