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Tag : Financial Planning

There is a popular phrase thrown around by teenagers that also applies to investors: FOMO (fear of missing out)

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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.

Capital preservation should be paramount in investors’ minds.

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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.

Importance of Superannuation and Financial Advice

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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.

SMSFs: Know your options for investing in property

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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

When It Comes to Reaching your Financial Potential: What does it really mean?

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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.

Top up your super before the end of the financial year

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The end of the financial year is rapidly approaching and, along with it, the opportunity to claim a tax deduction on additional superannuation contributions.

 Why contribute more to super?

Superannuation does impose restrictions on access to your money. It is, after all, intended to provide for your retirement. So why would you lock up more of your money? Because superannuation remains one of the most tax-favoured environments within which to build wealth. That can make it an ideal place to invest your long-term savings. 

What are some of the risks inside an Australian expats superannuation fund?

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We often hear Australian expats taking the age-old ‘set and forget’ approach when it comes to their superannuation. Here we wanted to explore some of the risks you may be exposed to in an Australian expats superannuation fund.

Generally, the superannuation can’t be touched for years. With this in mind, we are often asked why should expats bother looking into it before they jet off or even while they are abroad? A recent article out of the Australian Financial Review (AFR) has placed the spotlight on how our superannuation is invested and potentially exposing expats to investment risk that they may not have been aware of.

It points out the lack of transparency that members face when it comes to knowing where their super is invested and what the actual level of risk members take on by being in specific investment option (i.e. Balanced, Growth and High Growth).

How Much Do You Need for Retirement?

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Lifestyle is a very personal thing – luxury living for one person is a modest existence for someone else. This article offers you some guidance on the amount of money you need for retirement to cover your basic living costs and support a hobby or active social life. For example, do you expect to take frequent holidays and are you planning to enjoy regular glasses of wine or beer?

Choosing a retirement lifestyle is simple — you live the life you can afford. If you want a more salubrious lifestyle, you save more, earn more, win the lottery or inherit lots of money from a rich relative. The same philosophy applies to your retirement lifestyle. If you want a comfortable life in retirement, then now is a good time to start thinking about what that type of life will look like.

So, the big question is: how much money is enough for your retirement? Or more specifically, have you worked out the amount of superannuation and other savings that you will need to finance your retirement?

Kofkin Bond & Co Wins Australia’s Top Performing Financial Planners Award

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Kofkin Bond & Co announced today, it has won the Australian Financial Planning Practice Development Award 2017,  at the Total Financial Solutions Australia (TFSA) awards evening in Adelaide.

The award is presented to extraordinary and visionary advisers and practices, recognising best practice financial planning, qualities in leadership, customer focus and improve Australia’s financial literacy.

Kofin Bond & Co Tony Kofkin said the Award is testament to our commitment to improve our client’s financial literacy so they can make informed decisions for their future and improve well being.