• By Kofkin Bond & Co / October 16, 2018

    As from November 19, the first sizable industry fund, Australian super, will be making some significant changes to their fund, that may cause some concern for investors, especially if they were coming close to retirement.  These changes come as amid fears of a potential property market plunge.  Amongst the changes, property funds will be frozen for up to two years in the event of a crisis. Furthermore, the fund will prevent members from investing more than 70% of their savings in its property portfolio option.  

    According to Kofkin Bond and Co, one of the most challenging changes will be the rule that states that, for up to two years, the fund has the right to freeze any attempts at withdrawing savings from the property option, as well as prohibiting funds out of, as well as any new contributions into, the options.  

  • By Kofkin Bond & Co / October 9, 2018

    Capital Gains Tax changes will mean that Australian expats will be denied the capital gains tax (CGT) main residence concession if they sell their former main residence while living abroad.  To date, this stands to affect over 100,000 Australians who currently live and work overseas whilst owning property back home. 

    The GST tax advisers acknowledge that the Senate committee believes the CGT exemption may provide improved housing outcomes for Australians. However, they believe that there may actually be a counterintuitive reaction from expats as they decide not to sell properties until they return to Australia, creating a ‘lock-in’ effect rather than improving the quantity of housing inventory for sale. In other words; to avoid losing their ‘retirement plan’ to taxes, they will hold onto their property, potentially not selling it for decades, contributing to a lack of housing stock for sale. 

    In Hong Kong, expatriates have come together in an attempt to create a campaign that would influence the Senate Committee to overturn the proposal. They believe that such a policy will make it difficult for firms, both Australian and international, to employ Australians to work offshore if they have the potential to have life savings wiped as a result of selling their home while not residing in Australia. 

  • By Kofkin Bond & Co / October 2, 2018
    Choosing retirement and the perception of a person’s lifestyle, either currently or how one wants it to develop over time, is subjective – luxury living for one person is a modest existence for another. In this article, we offer guidance on the amount of money you may require for retirement to cover your basic living costs and support your desired style of living.
     
    Choosing a retirement lifestyle shouldn’t be any different to how you maintain your current lifestyle — you live the life you can afford. Living within your means today and thinking about what life after retirement will look like, helps to set you up for a comfortable future.
     
    So, the big question is: how much money is enough for your retirement? Have you worked out the amount of superannuation, and other savings, you will require to finance your retirement?
    Is $1 million enough to retire on? Although $1 million may sound a large sum, according to John Piggott, director of the Australian Institute for Population Ageing Research at the University of New South Wales, agrees: “$1 million will not do all that much for you. It will give you a very low [salary] replacement rate.”

  • By Kofkin Bond & Co / September 25, 2018

    Understanding your life insurance policy, and establishing from the beginning, that it is the right policy for you will save you time, money and potentially reduce the level of frustration when it comes to making a future claim. It has been reported that there is a 50% probability of a life event occurring, to any one person, that would result in the payment of a personal insurance claim whether it be life, total or disability insurance.

    Consulting with a financial/insurance adviser will ensure that you haven’t wasted, or about to waste, money that could be put to better use, by contributing to a gifted policy by either employer or Superfund. Often there are circumstances where, in such policies, the claim may be reduced to almost nil payment.

  • By Kofkin Bond & Co / September 20, 2018

    Recently, we have been closely watching market valuations that have been indicating overpriced equity markets and it has us concerned. I liken the current state of the markets to that of the movie, The Big Short, which was based on   the GFC (Global Financial Crisis) (If you haven’t seen the movie and would like to know what’s happening in our current markets I urge ask you to watch it this weekend.)

    Although we still have exposure to some growth assets including certain shares in both Australia and various regions, Having watched people’s wealth being destroyed during the GFC, has made us overly conservative has made us highly conservative for two reasons:

    1. Our job is to preserve our client’s wealth during both good and bad times
    2. If the bad times occur, we don’t want to be in a position where we simply must ride out the loss of capital. We strive to be in a position to be able to buy, great, however,  oversold, assets with cash.

  • By Kofkin Bond & Co / July 27, 2018

    There are moments in life where unnecessary risk is taken despite the warning signs. For example, swimming outside the flags at the beach when the surf looks exciting. The flags are there for a reason, they warn you about certain dangers like turbulent currents that could suck you out to sea. For the stock market, the warning flags are overvaluation and slowing growth and investors should take heed when they are waving.

    The overvaluation flag has been waving in the wind for some time. For example, the Shiller Cyclically Adjusted Price Earnings index (S&P500 price-dividend by its trailing 10-year average EPS) has been flashing extreme valuation levels for the US stock market. Based on current US valuations, if you invested in the S&P 500 you could expect a ten-year return of -3.2%. The only time in history that the US market had higher valuations than today was just prior to the Tech Wreck.

  • By Kofkin Bond & Co / July 23, 2018

    With little doubt, Superannuation (AKA Super) is likely going to be a persons longest-term investment and, therefore, deserves to be considered with a greater depth than perhaps their other financial investments.  There is no better time than now to engage in a conversation with a Kofkin Bond and Co financial adviser to ensure your Super is in order.

    Super is not a short-term discussion

    In the course of an average life, they may have many long and short-term savings and investment objectives. Saving for a holiday or a used car in your younger days may take a year or two, Whereas saving for a home deposit may take a little longer, and even then it may take thirty years, or more, to pay it off.

  • By Kofkin Bond & Co / July 20, 2018

    Growing up in Australia, we didn’t watch a lot of baseball; it was mostly cricket and rugby. But those sports share many commonalities with baseball.

    In cricket, there isn’t an umpire calling balls and strikes. Instead the batsman protects the wicket—two “bails,” or small pieces of wood balanced between three posts (known as stumps) behind the batsman. If the ball hits the batsman and would have otherwise hit the wicket (I’ll spare you excruciating caveats to this rule), or hits the wicket directly, or if a hit ball is caught, he’s out. But aside from protecting a much narrower “strike zone,” the batsman is under no obligation to swing. The batsman can wait patiently for a ball to hit. (But “hitting it for six” is every bit as exciting, I assure you, as a home run).

  • By Kofkin Bond & Co / July 12, 2018

    The purchase of property by an SMSF has long been seen as an attractive option for investors, however, the rules regarding any limitations are often misunderstood.

    We have put together this article as an attempt to clarify each of the ways property can be held by an SMSF.

    Option 1

    SMSF acquires property outright

    The simplest form of ownership by an SMSF is to own the property outright; The SMSF having purchased the property with cash.

    Key points

    • The purchased property is to be registered in the name of SMSF trustee, however, if that is not possible for legal reasons, then a caveat, instrument or declaration of trust should be executed over the property.
    • The SMSF’s share of the rent is to be paid to its bank account.
    • The SMSF’s share of property expenses should be paid or accounted for in the fund. Expenses may be paid by a member, or another party, however, they must be reimbursed to the payer to ensure they are not recorded as a contribution. If the payments do end up being treated as contributions, it’s imperative the relevant contribution cap is not exceeded in order to avoid excess contributions tax being applied.
    • The property cannot be used as security, this includes mortgages, liens, caveats or any other encumbrance.
    • The property can be rented to a related party – provided it’s a premise used for business which is leased on market terms.

  • financial potential
    By Kofkin Bond & Co / July 1, 2018

    Less is more. More is less. Reaching your financial potential is all about balance, perspective, knowledge, values, and how you define what is most important to your happiness. For some, the idea of ‘success’ holds a level of allure and enticement that will motivate their actions to make more money and surround themselves with the trappings of wealth. For others, the idea of financial success means ‘less’; less debt, less stress, fewer possessions, fewer complications. Whether you consider yourself a ‘more’ or ‘less’ person, it’s all perspective and the level of energy you are willing to invest, in order for your values and financial dreams to be met. (If only it were that simple to remove outside factors and influences.)

    Unfortunately, we can often fall victim to enticements, temptations and sometimes guilt or judgment from family, friends and, colleagues. There is then the constant array of online marketing that seeks to aid our deviation from our financial goals.