New Years’ Finance Resolutions

The new year is a time when a lot of us make well intended resolutions to kick start the year.  These resolutions may relate to health, work, family, and/or your finances. I say ‘well intended’ because we make them with the best of intentions to commit to them and benefit from them in the long term.  However, come February or March, and we find ourselves feeling guilty because we have not fulfilled our goals.  There can be many reasons why we do not always follow through with our resolutions, but I want to hone in on one in particular – finances.

You may want to get professional help with your finances but something stops you from picking up the phone to make an appointment with a financial adviser– “I don’t have enough money to invest yet”, or “I can’t afford it”.  I would argue you can’t afford not to see one!  In terms of not having enough money to invest, there are many other reasons why you could be benefiting from professional advice:

  • A financial adviser can illustrate the benefits of compounding interest over the long term even if you are only able to save a small amount each month. It is never too soon to start saving and we all need to start somewhere.
  • You may have many competing financial goals but with limited funds, and not sure which way to go. For example, should you contribute to super or pay more off your home loan?  Should you start saving or reduce a personal loan?  A financial adviser can provide one off advice relating to a particular question/need you have.  We can help you formulate realistic goals and implement strategies to help you achieve your goals in order of priority.
  • Are your personal insurances up to date? Even if you have not yet built up a pool of assets, you still need to ensure your family, your income and your lifestyle is protected in case of illness, injury or death.

In summary, you do not need a large sum of money before you seek professional financial advice. What you do need to do is ensure what you are doing, or planning on doing, is the right option for you.  Is it the most tax effective option?  Is your super invested appropriately?  Are your insurances adequate?  Are you paying too much for your insurance?

One of our advisers would be happy to meet you to discuss your goals and put you on the right path.  Now, pick up the phone…

 

Samantha Butcher – Financial Adviser

BComm DipFS

Christmas + Gift Giving

Christmas is a weird and wonderful time of the year, filled with family, friends, good times, presents, and that confusion of what day of the week is it, and how many days of leave are left.  Not to mention the confusion of still writing 2019 down as a date, three weeks in to the new year.

Christmas can also be very stressful when it comes to the awful topic of money, and spending money.  For those that are running a tight ship, it’s a stressful time, because they might not be able to do everything they can or want to.  Then there are those people that won’t be able to achieve what they can or want to.

The age-old adage of Charity begins at home doesn’t hold true as much as it may have in the past.  There are a lot of people doing it tough, and they need a hand through times such as this.  There are many great ways in which this can be done, whether it’s buying extra presents to donate under wishing trees, making up hampers as a work place, and donating to families in need, or simply through a cash donation to one of the many charities that help families have a great Christmas as well.  I know this is something we do at the Canny Group, and something that I do personally as well.

One hangover that you don’t want to have to deal with after Christmas, is the debt that we tend to rack up from overspending.  It’s not just credit cards, it is zip pay and afterpay as well.  As of 30 June, there was almost a billion outstanding in afterpay, and 60% of that was attributed to people aged between 18-34, which is staggering.

In December last year, $30 million was borrowed in Credit Cards.  Want to hear something scary?  If you owe $2,000 on a credit card and make the minimum repayments, it takes 17 years to clear the debt!  I guess the moral of the story is to not overspend or start planning earlier.  I know that in my family, on one side we do Kris Kringle, that way everyone gets one good present, rather than lots of presents that end up being forgotten or put away to never see the light of day again. Try not to let this time of the year overwhelm you and have loads of fun!

See you in 2020!

 

Steve Reynolds – Certified Financial Planner

BComm, Dip.FS[FP]

Superannuation Nominations – Make It Legit!

Don’t be trapped by the pitfalls of superannuation nominations – make it legit!

Have your circumstances changed recently?  Have you married, separated, divorced, had kids, or are your kids now over 18 years old?  It may be time to consider and/or review your superannuation nomination.

A superannuation nomination is a notice to your superfund trustee outlining who you want to receive your superannuation benefits after your death.  However, your superfund trustee is only bound by a nomination that is valid [in accordance with superannuation laws].

Many superannuation funds will not guide you through what constitutes a valid superannuation nomination, which makes it all the more difficult.

So, what constitutes a valid superannuation nomination? Your superfund trustee will look at the following hierarchy of people when considering how to distribute your super:

  1. Your spouse or ex-spouse;
  2. Your children [or other financial dependents]; and
  3. Your Estate.

Let’s break these categories down a bit further…

1. YOUR SPOUSE OR EX-SPOUSE

It may seem common sense that a superfund trustee would pay your super benefits to your partner automatically.  And this is true, particularly if you have made a nomination directing the payment to your spouse.  However, if, since making the nomination, you have separated or divorced from your spouse, the nomination is not revoked and, in fact, remains valid. Thus, your benefits may be paid to an ex!

2. YOUR CHILDREN

The intention of superannuation is to fund the retirement of you and your dependents.  Accordingly, a spouse and children who are considered to be financially dependent upon you will receive the most beneficial treatment under superannuation law.  Your children who are under 25 or have a disability will be considered dependents.

You must be careful with nominations to children as there can be pitfalls, including:

  1. You cannot nominate nieces or nephews [invalid];
  2. If the children are under 25 and you have a spouse or an ex-spouse who is alive, that person will be considered the guardians and your super will be paid to them [to hold upon trust for your children until they attain the age of 18];
  3. Children who are over 25 are determined as not being financially dependent upon you, and if the super benefit is paid to them then they will be heavily taxed upon receiving the death benefit.
  4. The taxation consequences can be different for children depending on their ages at the time of your death, which will create an uneven division in real [net] terms;
  5. As long as your children are over the age of 18 years, the superannuation fund will pay an entitlement directly to nominated children, meaning you cannot protect that benefit for your children until they attain an older age.

If you intend for your super benefits to benefit your children, and any of the above issues are in concern in your current circumstances, one solution may be to nominate your Estate as the beneficiary [provided you have an up-to-date Will].  Your Will then controls the distribution of the super death benefits to your chosen beneficiaries and much can be done to reduce or avoid the tax consequences described above!

3. YOUR ESTATE

As mentioned, nominating your Estate is a great way to cover most pitfalls of superfund nominations.  Tax can be avoided or reduced where you have children under and over the age of 25, you can implement asset protection strategies for your personal and superannuation assets for your children, and you can distribute your super death benefits to third parties [who aren’t your spouse or child] through your Will.

The potential consequences of this option are that this can create a further delay between your date of death and the distribution of the superannuation death benefits, and it also has the effect of increasing the value of your estate.  If your Will is challenged after your passing, the superannuation benefits will form part of the asset pool which can be claimed against.  Some food for thought regarding the significant asset that is your superannuation.

So, maybe it’s time to review your superannuation nomination – and for the greatest benefit, we suggest reviewing it concurrently with your Will and Powers of Attorney.

Contact our Legal Team for an appointment to review your Estate Planning to find out how we can help.

 

Katherine Taylor – Solicitor

BCriminology [History], LLB

Financial Plans Are COOL

IT IS PRETTY COOL TO HAVE AN ACTUAL FINANCIAL PLAN AND NOT JUST ‘ONE IN YOUR HEAD’

Whilst seeing a client, our discussion often turns to managing personal cash flow.  Some people are happy just living from pay-to-pay and don’t give much consideration to plans for the medium or long term.  Others haven’t really given the idea any thought but think it will all be “OK”.  However, more and more people are thinking about this, but don’t know where to start.

Financial management and retirement planning help people determine their personal saving targets, what they can afford to spend, and how best to arrange their financial affairs.  Retirement planning can quantify how much you need to have saved to retire.  When you are years away from retirement and your personal finances are ever-changing, this can seem like a challenging concept, but it is important to remember that a financial plan is a process, not a product.  It is something that requires discipline to start and at least annual maintenance and review.

A financial plan should include:

  • INVESTMENT PLANNING;
  • INSURANCE + RISK MANAGEMENT;
  • FINANCIAL MANAGEMENT;
  • RETIREMENT PLANNING;
  • TAX PLANNING; +
  • ESTATE PLANNING + LEGAL ASPECTS

Most people insure against at least some of the risks of financial loss due to death, medical issues and damage to property.  You could look at a well-structured and maintained financial plan as insuring against financial difficulty later in life.

Estate planning may also be an overlooked financial planning exercise.  The thing about estate planning is that it should go beyond simply preparing a will just to check off a box and say that it is done.  In a financial planning context, it is important to consider things like who your beneficiaries will be, joint asset ownership, income tax liabilities.  In the same way a married couple may plan for retirement together, it is important to consider what might happen if one spouse or the other died prematurely.  This may be as much a financial planning exercise as an estate law one.

Our financial planners – Samantha Butcher and Helen Yau can get you started on this journey and will assist and advise along the way.  Why don’t you call and make an appointment today, it’s that easy!

 

Amanda Wilkens – Director

B.Comm CPA

Buy Low Sell High

Buy Low Sell High is the first seminar in our free Property Seminar Series.

Buy Low Sell High is designed to provide an overview of the sale process, from engaging a real estate agent right through to handing the keys to the purchase.

We delve into:

  • WHO // you will need to engage to sell + why
  • WHAT // who does what, from the agent to the stylist right through to the broker + lender
  • CONVEYANCING // the general conveyancing process
  • SETTLEMENT DAY // what to expect + what happens if there is a delay
  • TRAPS + PITFALLS // that you should be wary of when consider to sell your property

So when the time is right to move on to your next dream home, selling your property for the best price will be a breeze!

Secure your FREE ticket through Eventbrite here.. https://www.eventbrite.com.au/e/buy-low-sell-high-tickets-75801936633

REFRESHMENTS INCLUDED + ALL CHILDREN WELCOME!

Property Seminar Series

With Spring in the air it’s no secret that it’s one of the best times of the year to go house shopping!  With that in mind, Canny Legal have put together their very own Property Seminar Series, with seminars covering the following topics:
  • SELLING A PROPERTY
  • BUYING A PROPERTY
  • INVESTMENT PROPERTIES
  • FIRST TIME HOME OWNERS
  • PURCHASE OF A COMMERCIAL PROPERTY
  • RENTAL/LEASING MATTERS
As well as our experienced and friendly team, we will also have special guests including local real estate agents, builders, financial brokers and many more to share their tips and tricks.

State of Wellness Summit

STATE OF WELLNESS SUMMIT // Creating Sustainable Positive Changes In The Lives of Women

We are honored to be sponsoring this amazing wellness movement that is all about creating sustainable positive changes in the lives of women.

You will be able to find our team on Thursday 10th October at GMHBA stadium sharing our knowledge with everyone on how NOT to sweat your finances.

Hosted by Geelong’s charismatic and life-changer Roxie Bennett, there will also be speakers including:
LAUREN BURNS // Olympic Gold Medalist, Naturopath/Nutritionist
JANE KINNEAR // Positive Change Coach, Speaker + Registered Nurse
REBECCA WINKLER // Naturopath + GAPS Practitioner
JO SURKITT // Though Leader, Speaker, Leader + Positive Change Creator
CAL STEWART // Feng Shui Consultant
MADELINE WEST // Food and Mood Centre at Deakin University
KIM BYRNE // Female Mentor, Author + Acclaimed Surfer
AMANDA WILKENS // Canny Group Director, CPA, Chief Financial Operator + Supporter of Women in Business
SAMANTHA BUTCHER // Financial Adviser
DR. CAROLINE TAYLOR-WALKER // Principal Doctor + Lecturer

THURSDAY 10TH OCTOBER 2019
HIGHER MARK @ GMHBA STADIUM GEELONG

Director Amanda Wilkens along financial adviser Samantha Butcher are going to be on stage from 3.30pm for the Q+A Expert Panel answering all of the questions related to women finances.

By using the following link, https://www.stateofwellness.com.au/ we are lucky enough to be able to offer a $50 discount on all tickets that are purchased, just enter CannyFriend as the promo code to apply your discount.

That Thing Called… Work/Life Balance

When I ask my clients who are fathers, what their most important goal or objective is, more often than not it is to provide for their family should anything happen to them.  Whether they be the sole income earner, or in a family with two members generating income, they want to ensure that if anything happens and they can’t work, they have the ability to still pay their mortgage, education costs, and put food on the table.

A person’s ability to earn an income is their greatest asset, and often for a small percentage of total income, they could cover up to 75% of what they’re earning.  In more serious cases of premature death, or being totally and permanently disabled, they want to ensure that mortgages are cleared, any future education costs are provided for, and that lifestyle expenses are there for any surviving spouses or children to ensure that nothing is left out, for a predetermined amount of time.

Work life balance is also important for families, as they want to ensure that they provide for their families, but the mother or father can still have time to attend any dance recitals, sports events, or any other extra-curricular activity that their children participate in.  As an example, I have a client in his 50s, who I have worked with for just on 10 years, and we created some investments outside of superannuation, so he could take some time off work as his son is an amazing basketballer, and needed help being taken to training and matches.  He made some sacrifices earlier on, and is now reaping the rewards.  I have the same situation of a client in his 60s, who has started a transition to retirement strategy to help babysit his grandchildren, as that is the next important phase in his life.  Regardless of age or situation, you need to make sure that you have the work life balance.  You are not what you do.

 

Happy father’s day to the fathers out there, and the mothers pulling double duty. Especially to my father, who retires at the end of the month.  I look forward to punishing him on the golf course!

 

Steve Reynolds – Certified Financial Planner

BComm, Dip.FS(FP)

Investment Properties – What Happens When You Sell?

Investment Properties – What happens when you sell?

When you sell an investment property, you are likely to make a capital gain or profit and will be required to pay tax on it.  The tax consequences depend on a range of issues, from whether you inherited or purchased the property, to your intention for the property if it was a new build.

In certain circumstances, an inherited property can be tax free when it is sold, but this is dependent on who you inherited the property from, how they used the property before you and when you sold it.  Was it an investment property for them or a principal place of residence?  The answers to these questions will have a bearing on whether there is no taxable capital gain or whether you will end up with a large amount of tax to pay.

Your intention for an investment property can make a difference on whether the ATO will consider it to be subject to capital gains tax or if it should be considered a profit-making venture, especially if you are building on vacant land.  Your intention should be made clear from the outset and documented to avoid complications further down the track.  If your intention is to build a property and keep it for a number of years and rent it, this leans more to the fact that it should be treated as a capital gain.  If you have to sell earlier than you had wished for, the ATO could view it as being a profit-making venture, depending on the time frame between the build being complete and the sale.  This is where documenting your intention can become important.  Where you buy vacant land, or land with a house and demolish it, then proceed to build units on the land, the ATO will consider this a profit-making venture.  In this circumstance, you are likely to be required to register for GST as well.

There are many considerations that need to be taken into account when selling an investment property and it is not always a simple process to determine the tax consequences.

 

Danny Grigg – Senior Accountant

B.Comm CA

Advantages + Disadvantages of Investment Properties

Advantages + Disadvantages of Investment Properties

Purchasing an investment property can be a very exciting time and can help build your wealth over time.  However, before rushing out to buy an investment property, it is important you consider the pros and cons.

ADVANTAGES

  • Provision of rental income to help top of other income
  • Help reduce income tax if the property is negatively geared i.e. the rental income is less than the interest on the loan
  • Potential capital growth in value of the property
  • Can be less volatile than shares or other investment options

DISADVANTAGES

  • Lack of investment diversification
  • A lot of money is tied up in one asset that can take time to sell
  • Buying and selling costs can be high
  • Tenancy risk. There is a chance your investment property will have periods of time where it is not tenanted.
  • You are responsible for all ongoing maintenance
  • Capital gains tax will be payable if the property is sold at a profit
  • Interest rate risk – a rise in rates will result in higher loan repayments and a potential reduction in net income
  • A substantial amount of capital is required from the outset

As always, we encourage you to seek professional advice to ensure the decision is right for you.

 

Samantha Butcher – Financial Adviser

BComs Dip FS

Financial Savvy

Mark it in your diaries ladies.. FRIDAY 31ST MAY + FRIDAY 21ST JUNE!

We are hosting a FREE seminar for women who would like some education on their finances + most importantly their financial security!

Our in-house Financial Planner, Samantha Butcher will be covering topics such as:

  • Women’s Money Challenges
  • Life Events + Women
  • Women’s Money Goals
  • The Need for Insurance
  • Tax Effective Ways to Contribute to Superannuation
  • Superannuation Beneficiaries
  • Superannuation Investment Options
  • Budgeting/Credit Card Debts
  • Wills + Powers of Attorney

Refreshments included + all children welcome!

LIMITED TICKETS VIA EVENTBRITE: https://www.eventbrite.com.au/e/financial-savvy-tickets-62243498981

Cyber Security – How Not To Be An April Fool

Do you know how valuable you are?  Identity thieves do!

Every year thousands of Australians have their identities stolen.  Criminals use stolen personal information to commit identity crimes.  This can leave their victims with a bad credit rating and impact their ability to gain finance, run a business, or access government services.

Once your identity is stolen it can take a long time to recover.  The same goes for your business, staff and client information and ensuring that this is also secure.  If your data is lost or compromised, it can be extremely difficult as well as very costly to recover.

The Australian Taxation Office (ATO) along with the leading industry bodies, consultation with the Cyber Security Working Group (CSWG), a group of tax practitioner industry groups and other partners, such as software developer associations have created a list of top identity security tips to help keep you, your information and your business safe.

Some tips and tricks for Individuals to consider:

TREAT YOUR PERSONAL INFORMATION LIKE CASH

Do not leave your personal information lying around. If your personal information is stole, it is very difficult to get back.  Keep your personal information private.  Only share it when you are required to, and only share it through authorised processes and to authorised people.

Some tips and tricks for Businesses to consider:

REMOVE SYSTEM ACCESS FROM PEOPLE WHO NO LONGER NEED IT

Immediately remove access for people who; no longer work for your business or have changed positions and no longer require access.  Unauthorised access to systems by past employees is a common cause of identity security or fraud issues for businesses.

DO NOT USE USBS OR EXTERNAL HARD DRIVES FROM AN UNFAMILIAR SOURCE

USBs and external hard drives may contain malware, which can infect your business computers without you noticing.  It can cost your business a lot of money to repair the damage.  Stolen information could be used to commit crimes, often in your business’s name.

Some tips and tricks for both individuals and businesses to consider:

ENSURE YOUR PASSWORDS ARE STRONG AND SECURE

Use multi-factor authentication where possible.  Regularly change passwords, and do not share them.  Multi-factor authentication required used to provide multiple pieces of information to authenticate themselves – for example, a text message sent to your phone when logging in to a website.  An additional layer of security on your accounts can make it harder for others to access your accounts.  Strong passwords with a mix of upper and lower case letters, numbers, and symbols also make your accounts harder to hack.

ENSURE ALL DEVICES HAVE THE LATEST AVAILABLE SECURITY UPDATES

Run weekly anti-virus and malware scans and have up-to-date security software.  Instances of malicious software (malware) are increasing.  It can be easy to accidentally click on an email or website link which can infect your computer.  In some instances, your device may be impacted by ransomware.  Ransomeware can; lock your computer until you pay a fee to criminal and/or install software which provides access to your bank accounts, allowing criminals to steal your money.

USE A SPAM FILTER ON YOUR EMAIL ACCOUNT

Always use a spam filter on your email account and do not open unsolicited messages.  Be wary of downloading attachments or opening email links you receive, even if they are from a person or a business you know.  They can infect your computer with malware and lead to your business or client information being used to commit fraud.  Spam emails can be embedded with malware and/or used to trick you into providing information, paying fraudulent invoices or buying non-legitimate goods.

SECURE YOUR WIRELESS NETWORK

Be vigilant when using public wireless networks.  Avoid making online transactions while using public or complimentary wi-fi.  Not all wi-fi access points are secure.  By making online transactions (such as online banking) on an unsecured network, you can put your information and money at risk.

BE VIGILANT ABOUT WHAT YOU SHARE ON SOCIAL MEDIA

Keep personal information private and be aware of who you are interacting with.  People are accustomed to sharing personal information on social media.  The same goes for many businesses as they also now have a social media presence.  However, before sharing ask yourself if it is information you want strangers to have access to.  It is very easy for information on social media sites to be shared outside of your network, even when your security settings are set to private.  Scammers can take information you publicly display and impersonate you or your business.  Impersonators may send emails to trick your staff into providing valuable information or releasing funds.

MONITOR YOUR ACCOUNTS FOR UNUSUAL ACTIVITY OR TRANSACTIONS

Check your accounts (including bank accounts, digital portals and social media) for transactions or interactions you did not make, or content you did not post.  If an organisation you deal with sends you an email alerting you to unexpected changes on your account, do not; click on included hyperlinks or open any attachments.  You should immediately; check your account and contact the organisation by phone.

ENSURE YOUR MAIL IS SECURE

Ensure your mail is secure and consider using a secure PO Box.  Mail theft is a leading cause of personal information security breaches.

DO NOT DOWNLOAD PROGRAMS OR OPEN ATTACHMENTS

Some programs contain malware that can infect your computer, or be used to harvest your personal and business information.  Be sure you are downloading authorised and legitimate programs.  Unless you know the program is legitimate, do not open attachments or download it.

DO NOT LEAVE YOUR INFORMATION UNATTENDED

Secure your electronic devices wherever you are.  Your personal information can be taken in an instant.  In some situations, you won’t even know it was stolen.  Make sure you; do not leave electronic devices unattended, secure your electronic devices with passcodes and securely store portable storage devices (such as thumb and hard drives) when not in use.

 

Source: Australian Taxation Office (ATO)