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Category : Finance

Government debt: how much is too much?

By Ashley Owen on May 18, 2017

 

The 2017 Federal Budget has turned attention as usual to the issue of government debt. Commonwealth governments ran a surplus during the mining boom from 2003-2008 but it has run deficits since the GFC to prop up employment and growth. The deficits have been funded by running up $500 billion (and rising) in debt. Is this too high? Can we afford it?

Life’s pretty straight…

Financial planning is very much so a “chicken or egg” exercise when it comes down to which part of one’s financial life. Where do you start?

While I love to delve off into economics, investments, strategies, etc. I find my default is to first ensure everything my clients intend to happen, even in the scenario of an unplanned event, still does happen.

Aussie equities vs Sydney housing: who’s the marginal buyer?

By Romano Sala Tenna on April 20, 2017,

Working as a stockbroker during the .com boom, I overheard an interesting conversation.

In early 2000, the technology sector was white hot. Hundreds of small mining stocks were ditching their mineral prospects and re-inventing themselves as Silicon Valley look-alikes. The move had been underway in the US for about four years and Australia was late to the party, but CEOs were working hard to make up for lost time.

Planning Ahead for (Deductions &) Changes in Conessional Contributions

Heres a good one for all of the Accountants and Trusted Advisors in the room where appropriate planning might assist you with:

  • Access tax deductions up to $30,000 under 49 years and $35,000 over 50 years (may become subject to work test) through concessional contributions. To be reduced to $25,000 across the board as at 1 July 2017.;
  • Bring forward next year’s concessional amount in this financial year, i.e. claiming for two years of concessional contributions in one year (i.e. between $55,000 and $60,000 concessional contributions this financial year).
  • This strategy would best be suited to those self-employed, operating a Self-Managed-Super-Fund (i.e. not receiving Superannuation Guarantee payments

The gift of education and the cost of funding it

Benjamin Franklin said that “an investment in knowledge pays the best interest”, but given the rates of interest on offer at the moment and the spiraling costs of education, saving enough to fund your kids’ or grandkids’ education can be a real challenge.

Wouldn’t it be great to know that school fees were covered? One less big ticket item to worry about, and the confidence of knowing that you are in a position to make the best educational choice for your child, without being unduly influenced by the price tag.

Education, particularly private education, can be monumentally expensive. For the vast majority of Australians, unless they win the lottery, they will be paying for education as they go, and feeling the pressure. As returns on savings attract tax, attempts to save consistently for a long-term goal can feel like one step forward and two steps back. Super is great from a tax perspective, but it’s not much help if your children will be starting school before you’re 65.

What should you do next?….. “Holding Cash is uncomfortable, but not as uncomfortable as doing something stupid with it”

What should you do next?

 

“I believe that Australian and world resource and bank equities plus US stocks are currently in a massive bubble which could burst, perhaps over the next year or two, or at least see a more serious correction in the short term.” That’s the answer I currently give existing and new clients when they ask about our current strategies, which is in line with our research companies current views {Morningstar} and reflects our current asset allocations in our direct funds.

“Holding Cash is uncomfortable, but not as uncomfortable as doing something stupid with it” Warren Buffett

Kickstart your Career in the Financial Planning Industry!

Kofkin Bond & Co, is a privately owned financial services firm providing innovative and holistic wealth management solutions to high net worth individuals and SMEs.

We currently have a client services administration position perfect for someone currently studying and majoring in Financial Planning. For the right person, the role can lead to the opportunity for career development upon completion of their studies.

The Dow hitting 20,000 and what it hides

By Ashley Owen on February 9, 2017  also our KBAC notes added

 

One event that grabbed headlines around the world in late January 2017 was the Dow Jones Industrial Average finally hitting 20,000 for the first time. The ‘Dow’ is the world’s oldest and most widely followed stock market index but it is also deeply flawed. It only tracks 30 stocks and they are not the largest stocks in the US by any means. The weighting of stocks is almost arbitrary and is based on the nominal share price of each stock and not on their relative revenues, profits, market values or importance. Despite the flaws, it is symbolic and it provides a reasonable proxy for US stocks in general. All other indexes of the US stock market have hit all-time highs recently, so the US market is hot.