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Australians are boosting their income through the sharing economy

By | Wealth Creation and Accumulation | No Comments

One in 10 Australians are supplementing their income through the sharing economy.

Erika Munoz and Lucerito Farrell from Sydney’s Rozelle are among the millions of Australians turning to the sharing economy to earn extra income.  The half-sisters have a pet-sitting business, Petsisttars that is bringing in about $1200 a month.  Munoz, 32, works full-time in software sales, while Farrell, 23, is a student.

It’s a way of combining their love of all creatures great and small with earning money.  The sisters have looked after everything from dogs and cats to lorikeets and rabbits in their own home or as part of housesitting.

“We had two dogs and a cat back home at home in Colombia and we miss them a lot and pet sitting is a good way to have pets around,” Munoz says.  “Now we get to mind pets of different shapes and sizes and they fill our hearts with lots of happiness.”

Their services and those of other sitters are offered through online marketplace, Mad Paws, which matches them with pet owners who need a hand.  The sisters have been using the site since halfway through last year and have managed to make enough money to take themselves and their mother on holiday to the Philippines.

Sharing economy is mainstream

One in 10 Australians are significantly boosting their income through the sharing economy by supplying services, according to estimates by the Sharing Hub.

Many are able to earn $1,100 a month, on average, working just five hours a week, providing handy extra cash to help pay bills, pay-off debts and even paying off the mortgage.  Almost half are also using the sharing economy several times a month as customers, with affordability cited as the number one reason, while one in four believe they receive a better service.

This year, comparison site Finder released the results of a survey of more than 2,000 people, showing that it is possible for them to make up to almost $20,000 year by making money from their spare time and from unused physical assets.  Finder estimated that one in five Australian adults are turning to the sharing economy for at least some additional income, with the average income from sharing platforms of about $7,300 a year from these side jobs.

Uber driving

The Finder survey suggests the most lucrative way to earn money on the side is as an Uber driver – with drivers, on average, earning $10,490 a year from the ride-sharing service.

Renting out a spare room on online platforms, such as Airbnb, is earning property owners $8,140 on average.

People working full-time jobs are also most likely to be making extra cash in the shared economy.  One in three of those with full-time jobs also have a side job through the sharing economy, compared with fewer than one in four part-time employees, fewer than one in five students and about one in eight of those who are unemployed.

Bessie Hassan, money expert at Finder, says Aussies are making some extra cash by utilising resources that sit idle and using technology.

“How much you make is dependent on how hard you work, but the research shows it can be very profitable,” she says.

“The sharing economy has taken-off in Australia and it’s seen as a legitimate way to boost income.  It may not make you rich, but it could be enough to pay for an extra holiday or boost your savings account.”

The survey found about 17 per cent of adults report renting out a property or a spare bedroom, 7 per cent say they have driven an Uber, and 6 per cent report freelancing or running errands and getting paid for it.

“It’s expected that this number will skyrocket as households look for creative ways to shield themselves from rising living costs,” Hassan says.

Local platforms

While Airbnb and Uber are the most well-known global sharing economy brands, Australia has its own successful home-grown platforms such as Airtasker, a hiring marketplace to find someone to perform tasks from assembling furniture to data entry, Zoom2u, for the transport of packages and parcels, and Spacer, where you can share your spare garage or attic space.

Mike Rosenbaum, the co-founder of Spacer and one of the founders of The Sharing Hub, which mentors about 25 Australian sharing economy businesses and is an investor in some of them, says one of the advantages of the platforms is that users don’t have to be business savvy as the platforms provide the bookings.

“These platforms give you a marketplace so that you can work for yourself with flexible working hours,” Rosenbaum says.  “The users of the platforms just have to have an appetite to earn a bit of extra income.”

Tax man wants a cut

It is important to remember that money made through the sharing economy is taxable income, just like any other form of income.

Those offering their services through sharing platforms, including those letting rooms on Airbnb and offering services through Airtasker, are required to pay tax on the income.

The Tax Office is using enhanced data matching protocols for the sharing and online economy, which is making it harder for taxpayers to hide income.

If you do only use online marketplaces like eBay to, say, sell household goods or possessions that you don’t want anymore, you are not carrying on a business and do not have to declare the income.

But Uber drivers, for example, are treated no differently to taxi drivers as far as the tax law goes.

The Tax Office has repeatedly warned income from renting out a car space or attic needs to be declared.

Source: AMP News & Insights

7 money personalities you may identify with or want to avoid

By | Financial advice | No Comments

Are you the friend that shouts more than what you can afford, or the one that’s happy with a handout because no one knows Struggle Street like you do?

When it comes to money and people’s behaviour, you may have a few labels or preferred ways of describing those nearest and dearest to you – and surprise surprise, they may do for you too.

I mean, how many times have you heard someone say so-and-so is stingy, or a show pony, or was born with a silver spoon in their mouth, or on the flip side, too generous for their own good?

If it’s something you’ve been thinking about, we’ve listed some common money personalities that may shed some light on where change, or consistency, may be of benefit to you.

Which personality type are you?

The scrooge

Generosity is not your strong suit and whether or not there’s a reason for it, you don’t like giving and you don’t like spending, unless maybe it’s on someone else’s credit card.

You might be under the assumption you’re doing it tougher than everyone else (whether that’s true or not) and may tend to favour people in your life who are financially beneficial to you, even if you’re a financial burden on them.

The gambler

You spend more than what you can afford and then spend the rest of the time trying to make ends meet. Whether it’s on the races, high-risk investments, designer labels or anything that drains you of cash, you tend to operate under a cloud of secrecy.

These behaviours can often be damaging to you and those around you due to a lack of financial security.  If you do need assistance, the Gambling Helpline is available on 1800 858 858.

The show pony

You buy only the best clothes, phones, accessories and even things you’ll never use as a status symbol.  You host parties on your credit card and generally prioritise possessions over all else.

You’re more than likely racking up some debt in order to keep up with the Joneses, while you probably know a lot of scrooges who are more than happy to take whatever it is you’re willing to give.

The spoiled

You’re happy to sit back and relax as you’ve got your parents, a partner or an income coming from somewhere that ensures you’re able to live the lifestyle you’ve become accustomed to.

The situation however is probably stunting your ambition to do things for yourself, which may create issues down the track should no one be there to do it for you.

The enabler

You’re probably quite sensible when it comes to spending.  You may even have quite a lot of cash stashed away which you’ve cautiously saved over the years.  Your downfall however is associating with those who are often spoiled or scrooges – those who function on the back of your hard work.

You give them money and you even loan them money that you know they’ll never pay back.  They resist being money smart because they know you’ll always be there to be money smart for them. And, despite the fact you may think you’re helping, you’re more than likely hindering their ability to help themselves.

The mentor

You’re often seen as the sensible one and your success generally comes down to hard work and not necessarily the biggest pay cheque.

You’ve always had a budget in place to ensure you live within your means.  You pay your bills on time.  You save for the future.  You compare your providers every 12 months.  And, you’ve even got a little left over to put toward the fun stuff.

The free spirit

You probably identify with a number of money personalities to a degree.  Some days you’re a scrooge because you have to be, sometimes you’re a show pony when you’ve got cash to blow, and sometimes you lend money to people you shouldn’t.

You know you have the potential to be a mentor but you’re a bit of a procrastinator and not a massive fan of hard work, although you’ve often wondered what financial success you could have if you did spend an afternoon sorting out your finances and mapping out things to do on your bucket list.

Source: AMP News & Insights

Investment bonds – An alternative to super

By | Financial advice, Wealth Creation and Accumulation | No Comments

A number of changes came into effect on 1 July 2017 that limit the amount of money those saving for retirement can put into super.  This includes new limits on concessional (or before tax) and non-concessional (or after tax) contributions.

The limit on concessional contributions has been reduced from $35,000 to $25,000 per annum and the limit on non-concessional contributions has been reduced from $180,000 to $100,000 per annum.

Additionally, the threshold where an extra 15 per cent tax (total of 30 per cent) is paid on concessional contributions applies to anyone earning $250,000 or more of ‘income for surcharge purposes.’  This threshold was previously $300,000.

In light of these changes, high income earners (those earning $250,000 and above) may now feel compelled to consider alternative investment structures outside of the superannuation environment that offer similar tax-effective benefits.  There are a number of options which may be useful in minimising or deferring tax, such as a family trust, or setting up a private company to hold investments, but for those on high incomes one of the more cost-effective, flexible, and tax-effective options may be an investment bond.

What is an investment bond?

Investment bonds (also known as insurance bonds or growth bonds) have features similar to a managed fund combined with an insurance policy and can be tax-effective for those on high incomes  providing certain rules are followed.

Most investment bonds offer investment options such as cash, fixed interest, shares, property, infrastructure, or a range of diversified investment options, with risk levels ranging from low risk to high risk.  The value of the investment bond will rise or fall with the performance of the underlying investments.

A long-term investment strategy

An investment bond is designed to be held for at least 10 years and you can make additional contributions over the life of the insurance bond.  To make the most of the tax benefits, each year you can contribute up to 125% of your previous year’s contribution.


Money can be withdrawn from the investment bond at any time, however if you withdraw your money before the 10 years is up, some of the income may be taxable, depending on when the withdrawal is made.  If no withdrawals are made in the first 10 years, any earnings on the bond will be tax-free.

10 year rule

Investment bonds are tax-paid investments.  This means when earnings on the investment are received by the insurance company, they are taxed at the corporate tax rate (currently 30%) before being reinvested in the bond.  This can make insurance bonds a tax-effective long term investment for those with a marginal tax rate higher than 30%.

If you hold the bond for at least 10 years the returns on the entire investment, including additional contributions made, will be tax-free subject to the 125% rule.  If you make a withdrawal within the first 10 years, the rate at which earnings in the investment bond are taxed will depend on when you make the withdrawal.

The 125% rule

Investors in investment bonds can make additional contributions each year.  As long as the contribution does not exceed 125% of the previous year’s contribution, it will be considered part of the initial investment.  This means each additional contribution does not need to be invested for the full 10 years to receive the full tax benefits.

If contributions are made to the investment bond that exceed 125% of the previous year’s investment, the start date of the 10 year period will reset to the start of the investment year in which the excess contributions are made.  You will then have to wait a further 10 years from this date to gain the full tax benefits.  If you do not make a contribution to the investment bond in one year, any contributions in following years will reset the 10 year rule.

If you are approaching (or have reached) your superannuation contributions limits and would like to find more about investment bonds and whether one may be suitable for you, please contact us to find out more.

5 ways to navigate your finances in your 40s

By | Financial advice, Holistic | No Comments

Although marriage, mortgage, and young children may have characterised your 30s, your 40s often feature growing responsibilities and ever-competing priorities.  Your parents are older, your mortgage is still on foot, children’s education costs are growing, and though retirement may seem a distant reality, planning for that reality becomes an important consideration.

The good news is that in your 40s, the financial planning you undertook in your 30s begins to come to fruition.  Perhaps even better news for many is that it’s still not too late to start this planning in your 40s if you haven’t already done so.

Getting organised and keeping your finances fit

A common goal across all age brackets is to organise and optimise your financial affairs.  Everyone needs a financial plan, and all plans should be in writing so as to be measurable and accountable.

At a minimum, your financial plan should encompass your current circumstances, such as specific financial goals, budgeting, emergency funds, cash flow, as well as your road map for achieving these objectives.  This road map should cover both wealth-accumulation strategies – that is, growing your investments – and wealth-preservation strategies, which can include using appropriately structured life and income insurance as well as appropriate legal documentation, should something happen to your health, life, or family situation.

Once you have this plan in place, you need to regularly review it and adjust it when changing laws and circumstances dictate.

Maximising your cash despite vying priorities

Do you have a budget?  In your 40s, you should have a family budget that you also regularly review.  Simply writing down and ranking your key priorities, then allocating the cash flow accordingly, can bring valuable clarity and simplicity to your budgeting.

Often, you don’t need to earn more to improve your cash flow; you just need to better manage the money that passes through your hands.  Depending on your marginal rate of tax, a dollar saved can almost be worth as much as $2 earned.

Paying off your mortgage faster

In your 40s, with luck, you’ve left behind the credit card debt and personal loans from your 20s and 30s.  After all, these days, you’ve got enough to juggle and should be dealing with only one non-deductible debt.  For everything else, don’t buy it if you can’t afford it (this includes upgrading to a bigger house that you really can’t afford).  There are a few techniques for accelerating the repayment of your mortgage and saving thousands of dollars of interest over the life of the loan:

Consolidating your debt;

  • Finding a loan with a great rate;
  • Making extra repayments;
  • Making repayments fortnightly;
  • Efficiently using a mortgage offset account;
  • A combination of the above.

Using superannuation effectively

Although superannuation is an important vehicle for your retirement wealth, if you’re in your 40s and more than 10 to 15 years away from retirement, it’s generally better to use your surplus cash flow for the repayment of non-deductible debt instead of additional pre-tax super contributions.  Within 10 years of retirement, it’s typically better to flip this strategy and focus on maximising superannuation contributions with your surplus cash flow.

Growing and accelerating your wealth

Given Australia’s ever-changing superannuation rules, it’s a good idea to have some investments outside of this retirement vehicle.  These investments can provide you with the flexibility of a retirement before the superannuation preservation age (the age at which you can access those funds).

You can grow your personal wealth either from your own cash flow (after tax savings) or by borrowing money to invest.  It may be appropriate to consider your wealth accumulation and debt management strategies together (that is, a debt recycling strategy).  A well-constructed portfolio is one that takes into account your objectives and personal circumstances. It should be well diversified and should focus on performance.

Navigating your 40s and your finances can be a challenging combination, but with some help and careful financial planning, you can achieve your financial goals and live the life you want.

Source: Money & Life.

Super v mortgage – can you guess the winner?

By | Financial advice, Superannuation | No Comments

The pros and cons of using your spare income to either pay more off your mortgage or increase your super need to be weighed up.  The direction you take depends on a few factors such as your age, how much you earn, your level of debt and your income tax rate.

Typically, if you are in your twenties for instance, you may not want to save for a retirement that is 40 years or more away.  A better strategy might be to invest in a home where you can build some equity before you start considering a retirement strategy.

However, the older you get, the more you might want to invest in your superannuation and begin the transition to retirement financially.

Things to consider if you take the mortgage route:

  • Paying no tax on growth in the value of your family home;
  • Access to redraw facilities if you need a quick flow of cash;
  • Equity which you can borrow against;
  • Reliance on the property market as a long-term strategy;
  • Changes to interest rates.

Things to consider if you contribute more to your super:

  • Boosting retirement income;
  • Tax-effective as tax on investment returns is capped at 15%;
  • Tax-effective when you salary sacrifice;
  • Potential benefits of Federal Government co-contributions if you earn less than $51,813;
  • Inability to access funds if you are under retirement age.

Questions to ask yourself

 If you are at the time in life where you feel it’s better to add more to your super, here are some questions to consider:

  • How much do you owe on your mortgage?
    • Sit down and do your sums to figure out how much money is going into repayments, and how long it will take you to pay off your mortgage.
  • How is your mortgage set up?
    • Do you have an interest-only strategy at the moment and how long is the life of your loan?  It might be worthwhile considering if this needs to be changed.  Switching to an interest only loan may also give you more cash-flow that can be invested into your super.
  • Is there cash looking for a better home?
    • You may have more money floating around than you think and some can go into growing your super balance.
  • Do you have the capacity to salary sacrifice?
    • Your employer may allow you to salary sacrifice some of your income which will be taxed at a maximum rate of 15%, saving you a tidy sum in tax if your income is currently being taxed at a higher rate.

Assess your personal situation with Revolution Financial Advisers to identify how much cash you’ve got and whether it could be better placed to give you more money in your retirement.

Source: Colonial and Capstone Financial Planning.

Is it better to buy an investment property or home first?

By | Financial advice | No Comments

There’s a lot to consider when buying an investment property or home, especially for the first time.

Have you been saving for a long time and feel ready to get into the property market?  Maybe you’re considering buying a home to live in or investing in a property you can rent out to somebody else.

Either way, it’s worth knowing some more about both options to ensure you’re making a well-informed decision, noting that regardless of what you choose to do, property prices can go through major swings that can occur with little warning.

Buying your first property to live in

  • First home owner grants.  Depending on which state or territory you live in, a first home owners grant could help you to finance your first home purchase.  This doesn’t apply to investment properties, and in some states you’ll lose your right to this grant if you buy an investment property first;
  • Security and stability.  You can stay in your home as long as you like, as long as you’re making your home loan repayments;
  • Exempt from capital gains tax (CGT).  Any home that is classified as your main residence, whether it’s your first place or not, is free from CGT when you go to sell it;
  • Expenses stack up and aren’t tax deductible.  There will be initial costs, such as stamp duty and legal fees, as well as ongoing costs, such as water rates, building insurance and repairs. When buying an investment property, you’ll also be hit with these costs, but depending on your situation some of the costs attached to your investment property may be tax deductible;
  • You may have to make some sacrifices. Where you really want to live may not be where you can actually afford to buy.  So, whether it means choosing a place that’s smaller, further out from the city, or looking for a job closer to your new home, you may have to make some trade-offs.

Buying your first property as an investment

  • You may get a cheaper place.  An investment property doesn’t need to tick all the boxes of your ‘dream home’, which means you could potentially buy something at a cheaper price;
  • It’s not an emotional decision.  Your purchase should be based on investment potential, including forecast rental return and capital growth.  So, instead of walking into a place and having to love the look of it, you can walk in with your investor’s hat on;
  • Earn rental income.  If you’re renting out your investment property, you’ll be getting money from someone else to contribute to your mortgage, which means you could pay off your loan sooner. Bear in mind however that the rent you receive may not completely cover your home loan repayments and additional costs;
  • Tax advantages and disadvantages.  Many of the costs associated with an investment property are often tax deductible.  For instance, the interest and fees you pay on your loan, advertising for tenants, as well as cleaning, gardening, maintenance and pest control.  Also, if your property is negatively geared—which simply means the interest, and other costs you incur are more than the income your investment property produces—the loss can reduce the amount of tax you pay on your earnings at tax time.  On the flip side, if you sell your investment property down the track and make a profit, capital gains tax may be payable;
  • Management and obligations.  If you’re time poor or located a long distance from your investment property, another thing you’ll need to think about is appointing a property manager to take care of certain duties.  On top of that, there are various responsibilities that apply to landlords before, during and when ending a tenancy and these can differ depending on which state in Australia the investment property is located.

Source: AMP News & Insights

Super investments

Super investment options – what’s right for you?

By | Financial advice, Superannuation | No Comments

Choosing the right super investment options at the right time could make a difference to how much money you have when you retire.

When it comes to your superannuation, the investment options you choose today and in future may impact how much money you retire with.

If you haven’t selected an investment option within your super, you’re probably invested in your fund’s default option, which will generally take a balanced approach to risk and return.

To get you up to speed, we’ve answered some commonly asked questions around how your money is invested, the different options available and how your preferences can affect your investment returns at any age.

What do super funds do with my money?

Typically, no less than 9.5% of your before-tax salary (if you’re eligible) is paid into super, which is then taxed at a maximum of 15%.  Your super fund will invest this money over the course of your working life, so you can hopefully retire comfortably.

Your super fund will let you choose from a range of investment options and generally the main difference will be the level of risk you’re willing to take to potentially generate higher returns.

If you haven’t selected an investment option, your super fund will usually put you into a default option, which generally means your exposure to risk and return is somewhere in the middle.

If you’re not sure what options you’re invested in, contact your super provider.

What are the super investment options I can choose from?

Most super funds let you choose from a range, or mix of investment options and asset classes.  These might include ‘growth’, ‘balanced’, ‘conservative’ and ‘cash’ but the terms can differ across super funds.

Here’s a small sample of the typical type of investment options available:

  • Growth options – aim for higher returns over the long term, however losses can also be notable when markets aren’t performing.  They typically invest around 85% in shares or property;
  • Balanced options – don’t tend to perform as well as growth options over the long term, but the loss is also less when there are market downturns.  They typically invest around 70% in shares or property, with the rest in fixed interest and cash;
  • Conservative options – generally aim to reduce the risk of market volatility and therefore may generate lower returns.  They typically invest around 30% in shares and property, with the rest in fixed interest and cash;
  • Cash options – aim to generate stable returns to safeguard the money you’ve accumulated.  They typically invest 100% in deposits with Australian deposit-taking institutions, such as banks, building societies and credit unions.

Super funds may have different allocations, so it’s important to read your super fund’s product disclosure statement before making any decisions.

What’s the right investment option for me?

Choosing the most suitable investment option generally comes down to your goals for retirement, your attitude to risk and the time you have available to invest.

For instance, if you’re young, you may have more time to ride out market highs and lows, and therefore be willing to take on more risk in the hope of achieving higher returns.

If you’re closer to being able to access your super, you may prefer a conservative approach as a share market crash could be harder to recover from than if you’re 20 years away from retirement.

While many people put off thinking about super, being informed and engaged from a young age and throughout your career may make a big difference to the returns generated and your final super balance.

Source: AMP News & Insights

When there is a will, there is a way

By | Estate Planning, Financial advice | No Comments

It’s probably not something you want to think about much less discuss with your kids but like it or not, one day we all pass away, and giving our loved ones a heads up on some of our financial affairs may make the process a whole lot easier.

That’s why when it comes to estate planning it can be a good idea to call a family meeting with your beneficiaries, your financial adviser and your legal adviser.

Not only can a financial adviser keep things running smoothly and professionally but it’s also an opportunity for them to get an overview of your family’s circumstances as a whole.  This way they are in a better position to determine the best strategy for you as a family.

Here are a few of the essentials they may cover off in a family meeting.

The contents of your Will

It’s a good idea to give your loved ones a heads up about the contents of you Will – in particular who your beneficiaries are and how much they are likely to receive in the form of an inheritance, super or life insurance benefit.

While this can be a difficult conversation to have and can often cause some friction among family members, it’s also an opportunity for you to explain your decisions.  This may help in keeping everyone happy and avoiding family disputes after you’ve gone.

A testamentary trust

A testamentary trust can be a flexible way to ensure your wishes are carried out after you die.  Basically, rather than being paid directly to your beneficiaries, your money is put into a trust and administered by a trustee appointed in the Will (until it expires).  This can protect your assets against undesired tax consequences, divorce proceedings, bankruptcy and even being squandered by an irresponsible beneficiary.  So if you’re setting up a trust, now could be the best time to air it.


Unlike other assets, your superannuation is not covered by your Will so it’s important to nominate beneficiaries.  A family meeting is the perfect opportunity to set-up binding death nominations to ensure your intentions about your super are carried out.

Your powers of attorneys

Powers of attorney are an important part of your estate planning – giving someone the legal authority to look after your affairs on your behalf if you lose the capacity to do so.  This includes your enduring power of attorney, who makes financial and legal decisions and your medical power of attorney who makes your medical decisions, when you can no longer do so.  A family meeting is a great place to discuss the appointment of powers of attorney as well as discussing important issues such as your views on treatment, your healthcare directive and if possible, how you would like to grow old.

Your investments, superannuation and insurance

If you’ve got any investments, super or insurance policies tucked away, now is the time to let your kids and your adviser know about it.  Not only will your kids get a better idea of how you manage your finances (and may follow your lead) but you won’t have to worry about anything going missing after you’ve gone.

Get off on the right foot

As you can imagine, a family meeting can be quite an emotional experience and there is a lot to cover.  So chances are you’ll be grateful to have an experienced professional around to maintain a level head and keep things running smoothly.

An additional benefit of holding a family meeting is introducing your financial adviser to younger family members.  This will give you peace of mind knowing that in the event of your death, your children will already have a trusted adviser who can give them the financial support they need to manage your estate and invest any inheritance they may receive.

Better yet, now that you’ve got them in the door, your adviser may even be able to give younger family member some tips to get them started saving and investing today.

So to ensure your final wishes are met, avoid unnecessary family conflict and get your children off to a good start, plan a family meeting today.

Source: BT

Who is the boss of your super?

By | Superannuation | No Comments

It’s tempting not to think too much about your super when retirement is still a long way off.  After all, it’s growing just fine by itself … right?  But the reality is, if you don’t take control now, you might be left with less than what you need when it’s time to put it to use.

Here’s how to be the boss of your super in three simple steps.

Step one: Know what you’re entitled to

If you’re working full-time or part-time for an employer, they generally have to make regular Super Guarantee (SG) payments into your super account.  But there are some exceptions, like if you’re:

  • earning less than $450 a month;
  • under 18 and working 30 hours or less a week;
  • doing domestic or private work for 30 hours or less in a week (for instance, if you’re a part-time nanny);
  • an overseas worker temporarily working in Australia and you’re covered by a bilateral superannuation agreement;
  • a non-resident working overseas but paid by an Australian employer;
  • a Reserve Defence Force employee (applicable to some payments only).

SG contributions are calculated as 9.5% of your Ordinary Time Earnings (OTE).  This includes loadings, commissions, allowances and most bonuses, but usually doesn’t include overtime pay.  Your employer also has to keep making SG payments even when you’re on sick leave, annual leave or long-service leave – but not if you take time off for paid parental leave.

Step two: Check that your super is being paid

When you start working for a new employer, they need to give you a Superannuation (super) standard choice form.  This lets your employer know which super fund to pay your SG contributions into.  All you have to do is provide your fund details and account number.

By law, your employer has to start paying SG contributions into your chosen account on a quarterly basis – and they must start paying any amounts that are due within two months of receiving your completed standard choice form.  If you think your employer isn’t making these payments – or they’re paying you the wrong amount – here’s what you can do:

  1. Check your super statement to find out how much your employer has been paying;
  2. Speak directly to your employer about how and when your payments are scheduled;
  3. If you can’t resolve the issue, lodge an enquiry with the Australian Taxation Office and they’ll take steps to investigate.

Step three: Boost your super savings

Employer SG contributions play a vital role in building up your super savings throughout your working life.  But they’re not the only way to grow your nest egg.

You may be able to set up a before-tax contribution from your salary, known as a salary sacrifice arrangement, with your employer.  This means authorising them to take out a fixed amount or percentage of your before-tax income from every pay, which they then deposit straight into your super.  But first, you should speak to your employer about how this arrangement would work for your employment situation.

Alternatively, you can use your own money to make voluntary contributions.  In this case, you may be entitled to claim an income tax deduction on your contributions.

An advantage of salary sacrificing or making personal tax-deductible contributions is that your contributions will be taxed at just 15% in most cases, instead of your usual marginal income tax rate.  However, it’s important to remember that the combined total of your SG payments, salary sacrificed amounts and your personal tax-deductible contributions can’t exceed $25,000 in a financial year or extra tax will apply.

What if you’re self-employed?  You don’t have to pay yourself super, but it’s still a valuable way to save for your retirement.

Source: Colonial First State


Using Failure to fuel your future success

By | Holistic | No Comments

To help us grow, sometimes we have to overcome our fear of failing – with this mind, here’s some ways you can use past failures to fuel your future success.

Almost everyone is afraid of failure, even if many of us know it’s an unavoidable feature of eventual success.  The list of people who have achieved incredible things despite experiencing disasters is long.  The more famous examples include Steve Jobs (the Apple board once ousted him from his own company), J.K Rowling (multiple publishers rejected her Harry Potter pitch), and Jeff Bezos (he ran a dud online auction site before starting Amazon).

But those are big names – how does failure fit into a less high profile career?

Don’t be afraid of failure

Bri Hayllar, a psychologist and business coach at the Centre for Corporate Health in Sydney, says it’s worthwhile understanding that failure is possible and acceptable “because often the alternative is doing nothing”.

That being said, not every culture treats failure the same way.  The United States has a deserved reputation for entrepreneurial success – and for tolerating failure.  The theory goes that unless you have failed at least once, you probably have not tried hard enough.

In Australia, by contrast, failure is sometimes seen as a career killer – and this fear of crashing and burning can stifle innovation.  So here are some tips to help overcome that fear.

Get in the right frame of mind

Hayllar says when people are in a very negative emotional state, it alters their cognitive processes – in a bad way.  They shut down.  On the other hand, those with a positive emotional state are more aware and more open to information, which in turn increases their creativity, problem-solving and decision-making skills.

“If we go into a job or a role thinking ‘I must protect myself, I must avoid risk, I mustn’t fail’ then we’re in that threat-negative space which is counterproductive to success.”

Learn from your setbacks

Of course, continual failure is not desirable.  The key is to process errors and improve.  Bill Gates and Paul Allen will forever be known as the creators of Microsoft.

They are less well known for Traf-O-Data, a failed attempt at using computerised data to improve traffic surveys for municipal governments.  Their time on the project was not wasted, though; it taught them the skills to simulate how microprocessors work, a key element of Microsoft’s success.

As part of their learning process, Hayllar says people should be conscious of their statements.  Avoid the temptation to say “I’m hopeless and I’ve failed”, and instead say “This project didn’t work, but what can I learn from it?”

Try and try again

Legend has it that Thomas Edison discarded thousands of prototypes before perfecting his light bulb.

Such resilience is a common story with successful people.  Hayllar is a firm believer that effort, grit and determination trump intelligence.  “For instance, we often see that really determined students will achieve more than the intelligent kids who don’t put in the effort.”

Just as artists don’t expect their first painting to be a masterpiece, we all need to appreciate that perseverance is required to achieve true success.

“You’ve got to have that grit to try again and keep doing things,” Hayllar says.

Source: Colonial First State

How to help ensure your superannuation contributions don’t exceed the caps

By | Financial advice, Superannuation | No Comments

Changes in the superannuation contribution caps, which kicked-in last year, give an added reason to keep a close eye on your contributions.

From 1 July 2017, the concessional (before tax) contributions cap was reset to $25,000 for everyone (irrespective of age).

For those earning a salary in excess of $210,000 or more – the compulsory Employer Superannuation Guarantee of 9.5% will total around $20,000 a year and will see your contributions edge close to the cap.  For those making additional concessional contributions, such as through salary sacrifice – they may be close to reaching the maximum if they are earning $180,000 (including superannuation guarantee) and contributing an extra 3% or earning $150,000 (including superannuation  guarantee) and contributing an extra 5%.  In certain cases, employers will match an employee’s additional contributions and in this case the concessional cap might be exceeded.

Going forward, the concessional cap will increase in increments of $2,500 (not $5,000 as was previously the case).  There is a formula the ATO applies to determine when indexation takes place, and the concessional cap will remain at $25,000 for 2018/19 also.

From 1 July 2017, the annual non-concessional (after tax) contribution cap reduced from $180,000 to $100,000 per year.

However, your non-concessional cap will be nil for a financial year if you have a total superannuation balance greater than or equal to the general transfer balance cap ($1.6 million in 2017–18) on 30 June of the previous financial year.  As a result, if you had more than $1.6m in super at 30 June 2017, you cannot make further non-concessional contributions this year.  You may, however, still be able to make or receive concessional contributions up to the $25,000 cap.

Provided you are under 65, or aged between 65 and 74 and meet the relevant work test, and meet all other requirements, you may be able to make contributions to super this year.  But it is important to monitor your level of contributions as penalties can be imposed where you exceed the relevant caps.

Using the ‘bring forward’ rule for your contributions

There are special circumstances where you may exceed the annual non-concessional cap amount and this is called the ‘bring forward’ rule.  The rules have become more complex since 1 July 2017.

How it works is if you are under 65 and have less than $1.5m in super as at 30 June 2017, you may be able to contribute at least $200,000 as a non-concessional this financial year.  If you had less than $1.4m at that time, you may be able to contribute up to $300,000.  However, you might not be able to do this if you started using the bring forward rule in either of the last two financial years.  Or the amount you can contribute might be reduced.

The amount you contribute this financial year may impact how much you can contribute in future years, and each year you still need to have less than $1.6m (or the relevant general transfer balance cap for that year) in super in order to make further contributions.

Source: BT

Budgeting apps

7 budgeting apps to help you save

By | Cash Flow and Budgeting Strategies | No Comments

Where does all that money go?  A host of apps are available to help you easily answer that question and even budget better, so you don’t get caught short in the event of a ‘rainy day’ and can feel more comfortable and in control of your finances every day.

We’ve found these seven apps to help you get off to a great financial start.


This free app allows you to track your personal expenses on the go and is very simple to use.  Made available by the Australian Securities and Investments Commission’s MoneySmart website (, it will give you a better picture of what you are spending your money on.

You can use it to record expenses such as your weekly household budget, work or travel expenses, particularly those cash expenses that are difficult to record or the costs of a special event, such as a wedding.

You can also separate your spending into categories like “needs” and “wants” to identify areas where you can rein in your spending and start saving.


Also available from the MoneySmart website (, this free and easy-to-use app will help you set realistic savings goals and help you to prioritise them, making it easier to achieve them and providing you with positive encouragement by tracking your progress.

You can also use this app to track how well you are saving for a holiday, wedding, car, house, renovation, school fees or anything else you are dreaming of.


Also free, this popular budgeting app integrates with many of the major Australian banks.  This means you don’t have to manually enter all your expenses onto the app.  Instead, you sync the app with your bank accounts and credit cards to track where your money is going.

You can use mobile photos and geo-location to input cash transactions like coffee or a beer, or add additional details like photo receipts, bills and invoices to help you track your transactions.

Pocketbook automatically organises your spending into categories like clothes, groceries and fuel, showing you where money is being spent.

You can also set up budgets for each category, see your balances and view your transactions.  The app ensures all your bills are automatically detected and in the one place.  Plus, you get notified when bill payments are coming up and if you have enough money to cover them.


Another free app, Mint brings your bank accounts, credit cards, bills and investments together so you instantly know where you stand.  You can see what you’re spending, where you can save money and can even keep track of your credit score.  Plus, it allows you to easily create budgets you can stick to.

You get bill reminders so that you pay bills on time.  And, you can schedule payments on the spot or for later, ensuring you never miss a payment again.


This app helps you to save and invest proactively, by using your digital loose change.

You simply connect it to your credit card, debit card or another funding source and allow it to round up each of your transactions to the nearest dollar.  It will then invest the change into a pre-decided diversified portfolio of investments that takes into account your investment goals and your risk tolerance.  The transactions are small so hopefully you won’t even notice them.

This app is free to download.  Once an account is opened, there are no fees on $0 balances.  After that Acorns charges $1.25 per month for accounts with a balance under $5,000 and 0.275% a year (charged monthly, computed daily) for accounts with a balance of $5,000 and over.


This app is great for people with work expenses.  Not only does it help you track and log all your work expenses, it also liaises with your office while you are away.

Expensify automates every step of the expense management process.  Its technology will read and scan your receipts and then add these to an expense claim that can be automatically submitted to your employer and approved.  You could very well get your expenses reimbursed in just a few minutes.

A very basic service is offered to individuals for free.  All the bells and whistles are available for US$9 a month on a corporate plan.


This app is a modern take on the time-tested envelope budgeting method, where the cash for each month’s expenses is taken out and divided into envelopes for each budget category – for example, groceries, transport, eating out or rent.

The idea is to stop spending on that category once you’ve emptied the envelope or before, if you’re really disciplined.

Goodbudget helps you to stick to your budget limits.  Rather than discovering that you overspent when it’s too late, you can plan your spending beforehand and only spend what you have.

Because you can share a budget across multiple devices, the app can also help couples manage the combined household budget and check know how each partner is tracking.

There’s a free version that allows you to create 20 envelopes and share across two devices.  However, for US$6/month or US$50/year you get unlimited envelopes and accounts, the ability to share these across five devices and to keep five years of history.

Source: Money and Life.

Property investment

Property investing through a self managed super fund

By | Financial advice, Self-Managed Superannuation Funds | No Comments

Property investing through your self-managed superannuation fund (SMSF) can be a great way to create wealth for your retirement.  By investing in property, you can diversify your super investments.  Any income from the investment property, including capital gains, will be taxed at concessional rates, so you should end up saving money in the long run.

How does it work?

Seek advice

The rules and regulations for setting up and borrowing through a SMSF are complex.  So it’s important that you obtain specialist financial planning, accounting and legal advice to make sure this investment strategy is right for you.

Review your SMSF trust documentation

If you already have a SMSF, you’ll need to make sure you have the necessary powers to borrow under your fund.  Again, it’s important you seek appropriate advice.

Set up a separate security trust

The first step to purchasing an investment property through your SMSF is setting up a separate security trust on behalf of your SMSF.  This new security trust will buy and hold the property, and provide a guarantee for your loan.

Loans to SMSFs are “limited recourse loans”.  This means that if you default the bank can only access:

  • the investment property;
  • any other property securing the loan.

The bank won’t be able to access your other super assets.

Funding your investment

Like regular property investment, you’ll need a deposit from your self-managed super fund, and a loan to cover the difference.  You’ll need to take into consideration how much the bank will lend you, and how much your SMSF will need to provide.  When you compare the loans offered by different banks, check interest rates carefully.  Some lenders charge their regular home loan rates, while others use higher business loan rates.

The security trust buys and holds the property

The security trust buys and holds the property on trust for your SMSF.  Rent payments flow through to your SMSF and help pay off the loan.  If this rent doesn’t completely cover your loan repayments, the extra needs to come from your SMSF.  You’ll need to consider your cash flow when thinking about this investment type.  Again, professional advice is important.

After the loan is paid off

Once your loan is fully repaid, the property can be transferred from the security trust to your SMSF.

For further information, please contact Revolution Financial Advisers.

SMSF and property

An insight into your SMSF purchasing business property with borrowed funds

By | Financial advice, Self-Managed Superannuation Funds | No Comments

Superannuation legislation now permits self managed superannuation funds (SMSF’s) to borrow to invest, as long as certain requirements are met.  If you are a small business owner, you can potentially use these rulings to help purchase your business premises, via your SMSF.


Your family company wants to release liquidity that is tied up in your business premises, which is unencumbered.  Your SMSF holds a substantial amount of cash and purchases the business premises from your company using an instalment arrangement that must meet particular conditions.

The SMSF makes a partial payment on the business premises and borrows funds to pay the balance plus the other acquisition costs, using the business premises as security under a limited recourse loan.  In the event of default, the lender only has recourse to the business premises and cannot claim any other SMSF assets.

The business premises are held in trust for the SMSF which is entitled to its income.  Your SMSF makes the loan repayments, paying off the loan over the agreed period.  After the loan is repaid, the legal ownership of the business premises can be transferred to the SMSF.

Consider this strategy if you:

  • Are a trustee of a SMSF;
  • Are a small business owner;
  • Want to purchase business property or transfer current premises to SMSF;
  • Have a long-term investment period.

Why consider this strategy?

  • The strategy could potentially unlock cash for your business;
  • Your SMSF does not invest all of its assets in the premises; it is possible to diversify into other asset classes;
  • SMSF assets are secure as the lender does not have recourse to your SMSF’s assets in the event of default;
  • Rental income from the property can be put towards the loan;
  • Your SMSF is entitled to all income and is liable to pay any expenses relating to the property;
  • Your SMSF is not obligated to pay additional instalments if it would incur losses in relation to the investment. The SMSF can walk away from the It may receive the residual amount after the premises have been disposed and the lender paid the amount owing;
  • Once the SMSF acquires the premises, income after expenses and any capital gain on disposal of the property would be taxed at concessional tax rates 0% to 15%.


  • Your SMSF trust deed must permit borrowing under an instalment arrangement;
  • A suitable legal and/or accounting professional should establish the appropriateness of the trust Investment in the business premises should align with your SMSF’s investment strategy;
  • The instalment arrangement must meet certain requirements to ensure that the SMSF remains complying;
  • As Trustee, you must be acting in the best interest of the SMSF beneficiaries;
  • Your SMSF requires sufficient cash flow to service loan repayments over the term of the loan;
  • Ensure future cashflow to cover any future contingencies i.e. interest rate increases or gaps in income;
  • Any loan arrangements may be subject to the provision of personal guarantees, which could expose individual guarantors to potential personal liability;
  • You should undertake an analysis of the strategy – considering both the positive and negative outcomes.

Looking at an example

Mr and Mrs Smith own Smith Co, which is a hardware business.  The company currently operates from a shop it owns.  The shop was acquired 20 years ago and has been paid in full with a current market value of $750,000.  The Smith’s need capital to expand their business and want to unlock the equity in the shop.  Their superannuation is held in the Smith SMSF, which holds $750,000 in cash and other investments.  They want to transfer ownership of the shop to the SMSF.  Stamp duty and transaction costs are estimated at $50,000.  The SMSF purchases the shop under an instalment arrangement that meets prescribed conditions.  A trust is set up to hold the shop on behalf of the SMSF.  To fund the purchase, the SMSF uses $400,000 in cash and a $400,000 limited recourse loan.  While the trust holds legal ownership of the shop, the Smith SMSF has beneficial entitlement to it.  The SMSF leases the shop to Smith Co at commercial rates.  The SMSF makes loan repayments utilising rent less expenses and the additional income and contributions from the SMSF.  Once the loan is paid off, the trust transfers legal ownership of the shop to the Smith SMSF.

Seek Financial Advice

There is an array of complex regulations surrounding superannuation and SMSF strategies.  At Revolution Financial Advisers, we can provide advice about SMSFs that is specific to your situation.

Commercial building

SMSF limited recourse borrowing

By | Financial advice, Self-Managed Superannuation Funds | No Comments

Given the growing focus on SMSF limited recourse borrowing arrangements (LRBA) in the media and the repercussions if the rules are not followed, the below provides an overview of this strategy noting benefits and risks.

What is an SMSF limited recourse borrowing arrangement?

An SMSF LRBA usually involves an SMSF taking out a loan from a third party lender or a related party, such as a member of the fund.  The SMSF then uses the loan, together with its own available funds, to purchase a single asset (i.e. a residential or commercial property) that is held in a separate trust.

Benefits associated with a LRBA Strategy

  • Leverage Superannuation savings – An SMSF LRBA allows the SMSF to borrow for investment reasons.  Borrowing to invest (“gearing”) your Super savings allows the fund to acquire a beneficiary interest in an asset that the fund may not otherwise be able to afford (i.e. business premise you own or operate from);
  • Tax concessions – Investment income received by an SMSF, including any income received because the fund holds a beneficial interest in an asset acquired under a LRBA, is taxed at the concessional Super rates;
  • Asset protection – Superannuation assets are generally protected against creditors in the event of bankruptcy.  This protection extends to assets that the Superannuation fund has acquired a beneficial interest in.  Hence, structuring the acquisition of an asset under a LRBA may provide greater asset protection benefits than may otherwise be available.

What are the key risks?

  • Details – Only assets that the SMSF trustee is not otherwise prohibited from acquiring can be used.  Usually, this means assets that you or a related party currently own cannot be acquired under a LRBA.  However, some exceptions do apply to business premises and listed securities that you or a related party own;
  • Property alterations and funding improvement costs – Assets acquired under a LRBA cannot usually be replaced with a different asset.  In a practical sense this means, during the loan term, alterations to a property acquired under a LRBA are prohibited if it fundamentally changes the character of the asset;
  • Cost – Be wary of additional costs associated with acquiring an asset under a LRBA that otherwise do not apply.  For instance, an SMSF LRBA requires a separate trust to be established and the drafting of separate legal documents such as trust deeds and company constitutions (if the trustee of the separate trust is a corporate trustee);
  • Liquidity – Loan repayments are deducted from your fund, so it’s important to ensure your fund always has sufficient liquidity to meet the repayments.  Careful planning is needed to ensure contributions and the fund’s investment income is adequate to meet the loan repayments and other existing and future liabilities as they occur;
  • Loan documentation and purchase contract – The Australian Taxation Office has noted that certain LRBA entered into by SMSF trustees have not been structured correctly.  Some of these arrangements cannot easily be restructured or rectified and unwinding the arrangement could require that the property be sold, resulting in a substantial loss to the fund;
  • Tax losses and capital gains – Any tax losses which may arise because the after-tax cost of the property exceeds the income derived from the property are quarantined in the fund.  This means the tax losses cannot be used to offset your taxable income derived outside the fund;
  • Governing rules and other matters – Trustees should always consider the quality of the investment they are making and whether entering into a LRBA is appropriate with the investment strategy.

An SMSF LRBA is a strategy that may assist members to increase their retirement savings; however, there are many risks and issues that should be evaluated before pursuing such a strategy.

For further information on SMSF LRBA, please contact Revolution Financial Advisers.

Keys to de-stressting a mortgage

Keys to de-stressing a mortgage

By | Financial advice | No Comments

According to a paper1 for the Centre of Policy Development and University of Canberra, Australians have a tendency to be over-confident in our ability to repay loans. We also underestimate the likelihood of things potentially going wrong in our lives.

Have you ever heard yourself or someone else say “I’ll be able to repay my loan, provided I keep my job, don’t get sick and I’m not hit with any large unexpected bills”? Chances are you probably have. But things can and often do go wrong.

Causes of mortgage stress

A study2 was completed for the Royal Melbourne Institute of Technology (RMIT), which looked at the specific triggers that have resulted in Australian households being unable to meet their mortgage repayments. Survey respondents were asked the initial causes and, if they changed, what the final causes were. They were also able to identify more than one cause.

How to reduce mortgage stress

Like most things in life, it’s difficult to make borrowing a stress-free exercise, but there are a few things you might consider that may help to reduce the angst.

1.   Build up a buffer

It’s a good idea to hold (or build up) a cash reserve in a mortgage offset account to provide a buffer that can be drawn upon to meet your loan repayments if you become ill or are off work for other reasons.

2.   Take out personal insurances

It’s important to ensure your income (which is what services your debts) is not compromised due to certain events beyond your control. One way to do this is to ensure you have adequate personal insurances. Key examples include:

  • Income Protection Insurance which can replace up to 75% of your income if you are unable to work due to illness or injury. This can ensure you are able to continue meeting the majority of your living expenses, not just your loan repayments;
  • Critical Illness Insurance which can help you service or pay off your loan and meet a range of expenses in the event you suffer a specified illness, such as cancer or a heart attack;
  • Total and Permanent Disability Insurance which can help you service or pay off your loan and provide an ongoing income if you become totally and permanently disabled;
  • Life Insurance which can be used to service or pay off your loan and provide your family with an ongoing income if you pass away.

3.   Take out mortgage protection insurance

Many lenders offer insurance when you take out a home loan that covers the mortgage (often up to a specified amount and for a particular period of time) if you die, become disabled or your employment ends involuntarily.

4.   Fix the interest rate

Fixing the interest rate on your home loan can provide protection against rising interest rates. The downside is there are often restrictions on making additional payments into a fixed rate loan, which would limit your capacity to build up a buffer. Many people find a combination of fixed and variable rate loans works best, as additional repayments can be made into the variable rate portion of the debt.

5.   Don’t add fuel to the fire

Over 40% of the people who completed the RMIT survey responded to the initial difficulty in meeting mortgage repayments by using credit cards more often than they normally would. Using debt to service debt is very likely to compound the problem.

6.   Review your situation

At the first sign of a problem, it’s essential to seek advice, as there may be a range of potentially viable options to explore. Better still, you may want to seek advice before you decide how much to borrow.

How can we help?

We can help you assess your budget and cashflow situation and determine your affordability level. We can also determine your insurance needs and advise you on a range of other financial matters.

  1. Source: Understanding human behaviour in financial decision making: Some insights from behavioural economics. Paper to accompany presentation to No Interest Loans Scheme Conference “Dignity in a Downturn” June 2009. Ian McAuley, Centre for Policy Development and University of Canberra.
  2. Source: Mortgage default in Australia: nature, causes and social and economic Impacts. Authored by Mike Berry, Tony Dalton and Anitra Nelson for the Australian Housing and Urban Research Institute, RMIT Research Centre, March 2010.

Source: MLC/NAB


Borrowing to invest

Your SMSF can borrow to invest

By | Financial advice, Self-Managed Superannuation Funds | No Comments

As Self-Managed Superannuation Funds (SMSF) become more popular the demand for more investment opportunities within that structure increases. Changes now mean that as long as strict conditions continue to be met, your SMSF can now borrow to invest, thus further bolstering retirement savings.

How does it work?

Borrowing for investment within superannuation depends on what type of asset is being purchased; however, the basic principles of an instalment arrangement, whereby the fund pays a percentage upfront and the remainder in instalments over a period of time, remains the same.

Investment property

All investment property will be owned by a separate entity, known as a Security Trust, with the SMSF having a beneficial entitlement to the Trust. The Trust can lease the property on commercial terms, with the income used to pay any expenses associated with the property. The net income is then paid to the SMSF. It is this income, along with any other fund income or member contributions, that provides the income source for the loan repayments.

Under a limited recourse loan, the property is security for the loan, which, in the event of a default, provides the lender with recourse to the property and assets owned by the guarantors, but not over any other assets held by the SMSF. After the loan is repaid, the SMSF has the right, not the obligation, to acquire the property.

What are the benefits?

 There are many benefits associated with borrowing through a SMSF. Some of these include:

  • An increased exposure to capital gains;
  • Reduced rates of capital gains tax;
  • Access to tax deductions within the SMSF.

Things to consider

Before borrowing through an SMSF, the following factors should be considered by potential borrowers:

  • The SMSF trust deed must allow for borrowing under an instalment arrangement;
  • Investment in certain asset classes must be consistent with the SMSF’s investment strategy;
  • A minimum deposit of 20% is required for purchases of residential investment property or 30% for commercial property;
  • The instalment arrangement must meet certain requirements to ensure that the SMSF remains compliant;
  • The SMSF requires sufficient cash flow to service the loan over the term of the Cash flow must be sourced from the net income of the asset, other investment earnings, or member contributions;
  • Arrangements must be at arm’s length and transacted at market rates;
  • The benefits of the strategy must be weighed against the cost of setting up and maintaining the arrangement;
  • Professional investment, taxation and legal advice should be sought before entering into an arrangement.

This is a very complicated area and the penalties can be severe.

Contact Revolution Financial Advisers to discuss your options.

lodging your tax return

Completing and lodging your tax return doesn’t have to be hard

By | Financial advice | No Comments

Completing, lodging and staying up to date with your tax returns doesn’t have to be hard.

This article is not intended to be taken as taxation advice and if you need any help lodging a tax return speak to an accountant or tax agent. They’ll work with you to understand the ins and outs of your financial situation and can guide you through the tax return process.

1 – Do you need to lodge a tax return?

If you’ve paid any tax on your income between 1 July 2017 and 30 June 2018, then you’ll probably need to lodge a tax return. And remember, your income includes money you receive from working – whether it’s from an employer, freelance work or running your own business – and also any returns on your investments.

You might also need to lodge a tax return in other circumstances. If you’re not sure whether you have to complete a tax return for this financial year, you can find out on the ATO website ( or by contacting a tax agent or accountant.

2 – How do you lodge a tax return?

There are a variety of ways you can lodge your return including MyTax which allows you to lodge your tax return online and is provided by the ATO. To get started, you’ll need to set up a MyGov account linked to the ATO. You’ll also need your Tax File Number (TFN).

Another option to lodge your return is to get a registered tax agent or accountant to lodge your tax return on your behalf. When choosing a tax agent, make sure they’re reputable and are registered with the Tax Practitioners Board. You’ll need to pay a fee for their services, but the amount is usually tax deductible.

3 – When do you need to lodge it by?

If you’re doing your own tax return through MyTax, you’ll need to submit it by 31 October 2018. But, if you get a tax agent or accountant to lodge it for you, a later deadline may apply.

4 – Can you claim any deductions?

Have you made any donations to registered charities this financial year? If so, you might be able to claim a tax deduction on any amounts of at least $2. Different rules apply, so check with an accountant or tax agent to see if you can make a claim. There may be other tax deductions you can claim as well, depending on your job and work situation.

The ATO has information about the types of work-related deductions you might be able to claim such as travel, tools, uniforms, training and education costs and home office expenses.

In some instances, it may even be possible to claim deductions on your personal super contributions or costs incurred from generating investment earnings.

You’ll need to keep receipts for any expenses you want to claim. A tax agent or accountant can help you work out which deductions you’re eligible for.

5 – What happens next?

Once the ATO has processed your tax return, they’ll send you a notice telling you if you’re entitled to a refund or if you have a tax debt.

If you or a tax agent or accountant submits your tax return electronically, it usually takes two weeks for your refund to be paid into the bank account you nominated on your tax return. You can track the progress of this payment through MyGov.

If you owe tax to the ATO, they’ll provide instructions on how to pay this via BPAY or with a credit or debit card.

Source: Colonial First State

Planning is the key to making it financially

Succeed with plan of action

By | Financial advice | No Comments

Whether your goal is to pay off your mortgage or go on holiday each year, you’re more likely to succeed with a plan of action.

If you’ve paid off your home, have a healthy stash of super and take an overseas holiday each year, you’ve made it financially. That’s the view of many Australians according to recent research.

A study by comparison site Finder found paying off the mortgage is the financial milestone 74% of Australians value most. Having enough in super to retire comfortably comes a close second for 59% of us, and one in three people see the ability to jet-set overseas each year as a sign of financial achievement.

These are all reasonable goals, and definitely a lot more sensible than owning a sports car, which 5% of people say indicates financial success (for the record, cars are a dreadful investment!).

No matter what your financial goals look like, you’ve got a far better chance of achieving them with a plan of action in place.

Let’s say for instance, that you’re keen on paying off your mortgage early. It’s a smart strategy that will leave plenty of spare cash to devote to overseas travel.

The trick is to plan how you’ll get there with clear steps you can stick with over time. A good starting point is to check the rate you’re paying. The average variable rate is currently 5.3% – that’s a terrible rate when you consider there are plenty of loans costing less than 4%.

If you’re sure your loan is competitive, one of the easiest yet most effective strategies to be mortgage–free sooner is to pay a bit extra off your loan each month.

On a mortgage of $400,000 with a rate of 4.0%, tipping just $20 more into the loan each week could see you clear the slate 18 months ahead of schedule and pocket savings of $17,217 on overall interest.

If you’re keen to grow your super, talk to the boss about contributing to your fund through salary sacrifice. This is where part of your before-tax wage or salary is paid into your super rather than receiving it as cash in hand.

Before-tax contributions are taxed at just 15%, which is below the personal tax rate of most workers, so salary sacrifice can be a very tax-friendly way to boost retirement savings. Chances are, after a few pay days you won’t notice the difference in your pay cheque but it can have a valuable impact on your final nest egg.

The start of the new financial year is a good time to think about the money milestones that matter to you – from building a portfolio of investments to starting a successful business or being able to retire early. Don’t just nut out some goals though, think about how you will achieve them, and start putting plans in place to make it all happen.

Source: Amp

Paid off home loan

You’ve finally paid off your home loan, now what?

By | Financial advice | No Comments

Owning your own home outright is a great achievement, but, once the home loan is gone, think about your next steps to having a happy and secure financial future.

While the goal of paying off your home loan is a common one, it’s important to work out a smart plan for how to use the money that used to go to your lender.

Your first instinct might be to reward yourself and, after years of sacrifice and hard work, why not? But once you’ve taken your dream trip or splashed out on a new toy it’s wise to take more of a long-term view.

Consider boosting your super to retire your way

This window provides an opportunity to take a look at the type of retirement you’re hoping to live. While you might be surprised at how much a comfortable retirement actually costs, we could help you determine more accurately how much you might need.

Perhaps your super balance doesn’t quite match what you think is needed to fund your retirement dreams? If so, the lead up to retirement is a good time to give your super that extra boost.

By channelling the money that once paid off your home loan into your super, either by salary sacrificing from your pre-tax salary or paying with after-tax funds, you can give your super a decent lift.

Invest to build future wealth

If your super’s in good shape, you might like to use the surplus funds to build your wealth via other investments.

If you prefer investments with a lower risk profile, savings accounts or term deposits could be the way to go.

But if you can invest for a five to ten-year timeframe, you might consider shares or managed funds. These can provide income in the form of dividend payments, plus the potential for capital growth.

Another option is buying an investment property. While the thought of taking on a new housing loan may be the furthest thing from your mind, the potential to cover repayments with the rental income could make it worth considering.

Work less, enjoy life more

Now that such a major financial commitment is no longer hanging over your head, you could consider taking a step back from work. Known as transition to retirement (TTR), this can provide financial flexibility, allowing you to work less without reducing your take-home pay, by topping it up with a portion of your super taken as a pension.

Explore your goals

You may be in a position to pursue other goals that go beyond building your wealth. Perhaps you want to give your kids a leg up financially or assist ageing parents to live a happier and secure retirement. Whatever your future plans, contact us to assess your situation and help you understand the impact of each option to find the path that is right for you.

Source: AMP.