Savings Accounts

Many people depend on a financial advisor to help them achieve their financial goals. Financial advisors have access to a great deal of knowledge about finances as they are trained especially in this area. You can find a financial advisor by searching the Internet (websites), going to a bank or financial institution, or looking in the phone book. Friends and family may also be able to recommend a good financial advisor. Make sure your financial planner is properly qualified and licensed with ASIC (Australian Securities and Investment Commission).

Financial advisors charge in a variety of ways. They may charge a flat fee at an hourly rate, or a percentage of your income/assets. Some financial advisors are free - they get paid a commission on the products they sell. Most people feel this creates a conflict of interest, as they will certainly push those products from which they get the biggest percentage, rather than what is most likely to suit you.

Those financial planners who work for a bank are likely to only push the bank’s products - this is only natural, but remember the banks want to make money first, so their products are not necessarily designed to cater to your own specific needs.

Real-estate investment is big business in Western Australia, like for example much of the world. This is especially true of rental property. A well-maintained rental property in Perth, for example, could net an investor many thousands of dollars every year.

One of the most successful real estate investors own anywhere from a few to dozens of properties within a specific region - enough that managing them all can be quite a challenge. Upkeep, tenant needs, turnover, filling vacancies, and myriad other tasks can keep an investor busy for hundreds of hours a week, especially if each new challenge needs to be researched before it can be addressed. Perth real estate investors would do very well to hire a property management professional.

A Perth property manager knows not only the regular tasks associated with managing investment property, but in addition city and region-specific concerns. They are familiar with the various neighborhoods and know, for example, who to call when they needs reliable plumber at three in the morning or a tow-truck service on a Sunday afternoon. A property owner could spend HOURS trying to arrange for these services and would likely pay much more. Property owners maintain relationships with service providers based on regular communication and need - they can save you money.

Perth property managers are well-versed in the processes of cleaning and repainting commercial and residential properties when tenants move out, and can turn vacancies into desirable new tenants very quickly. This last point alone can often pay for a Perth Property Management service very quickly, as an office or apartment sitting empty cost the property owner money every day that they’re not receiving rent for it. The speed and professionalism with which a good property manager can fill vacancies is usually incredibly valuable.

Could you learn the skills needed to manage your own Perth property? Sure you could, and you’d surely save some money. Let me assure you, though - the money saved will be traded immediately for headaches and late nights. Property management businesses have something that you, as a property owner and investor, will never have - laser focus. You may have a lot of projects going at any given time. You may be searching for new properties or running other businesses on your income from investment property. No matter the reason, a property management professional spends their days dealing with the kinds of issues that distract you from your REAL work.

Maintenance, tenant interviews, chasing down back rent, managing utility service providers, contract negotiations - these jobs are incredible time vacuums, especially for an owner/landlord who deals with them as they arise. Through time management and batching, a Perth property manager can be far more efficient than you can and will provide better service to you AND to your tenants because of it.

Property investment is a fantastic tool for creating income, improving your net worth, and ensuring your financial future, but it’s a game with an incredibly steep learning curve and a lot of potential pitfalls. Hedge against failure and regret with your Perth properties by bringing in an experienced property manager to help. You won’t be sorry.

Congratulations, you've found your dream home! It's just what you've been looking for; it's in a great suburb with a choice of terrific schools, there's plenty of parkland for the kids to play, the kitchens and bathrooms have been renovated, and your bedroom gets the morning sun! But the really good news is - you already know you can afford it!

It's the scenario we all dream of. There are some amazing online calculators you can use to find out so much before you go house-hunting or even talk to a mortgage broker. Find out:

- How do I achieve my savings target?
- How much can I afford to borrow?
- Make home loan comparisons
- Can lump sum repayments shorten the length of your loan?
- Can I make extra repayments?
- How much is stamp duty?

And there are many more. I was impressed with the detail provided and how easy they are to use. Even if you don't know what questions you should be asking, the list of calculators available will prompt you.

You can save so much time and effort by doing this research beforehand. Once you've found your dream home, the next thing is to find the right home loan - one that is both flexible and affordable. Let's take a brief look at the different types of loans available:

Standard Home Loans are where you borrow the amount you need in order to complete the purchase of your home. You'll need a substantial deposit and a good savings record. The loan repayments will probably be calculated over a 25 or 30 year term, on a fixed or variable rate of interest.

Home Equity Loans allow you to use the capital equity you have accumulated in your home. You may wish to renovate or make some major repairs, or perhaps you want to use the equity as security against the purchase of an investment property, buy a car or take a holiday.

Refinance Loans - There are many reasons for wanting a refinance loan. Your partner has given up work to stay home and mind the new baby and consequently, the household income has dropped. Or maybe you've noticed your current lender isn’t keeping pace with the market and there are much better loans available elsewhere.

Reverse Mortgage / Reverse Home Loans are perfect for those who are who are retired and are asset-rich but cash-poor. This kind of loan allows you to draw a cash advance against the equity you have built up in your home. If you've retired, you may need to fund your living expenses, meet unexpected medical bills or you just want to take that well-earned overseas trip. Like any loan, interest will accumulate, but no repayments may be necessary until the house is sold.

Debt Consolidation Loans can give you greater financial freedom by combining two or more loans – including personal loans and credit card debt – into a single loan with the convenience of only one monthly repayment. Not only will it make your finances easier to manage, it will reduce your total monthly repayments.

Low Doc Loans can suit those who don't fit the criteria for a conventional home loan. Perhaps your financial history or current employment situation makes you a high-risk borrower. Fees, charges and interest rates are generally high because the lender is assuming more risk.

Shared Equity Mortgages – are a viable alternative for cash-strapped home buyers or owners. In a shared equity scenario, a traditional mortgage lender will provide a home loan in partnership with an equity provider. The equity provider will effectively be taking a stake in the ownership of your house. Shared equity mortgages are designed to give you access to a more expensive property which would normally be out of your reach using a traditional home mortgage. However, you must talk to a mortgage broker and make sure you fully understand all the implications and are happy sharing the future capital appreciation from your property in return for lower monthly loan repayments throughout the term of your loan.

Family Pledge – is a home buying solution like no other. Family Pledge is available to assist first home buyers or investors enter the property market; the central idea being that your family, as guarantor, helps you fund the purchase of your property. The support from your family would allow you to borrow more money than you would otherwise have been able; rather than having to settle for the cheaper alternative, you could get the house you really want! Your guarantor must understand the responsibility they are assuming – should you default on your repayments, the mortgage lender would sell the property and your guarantor would be asked to cover any shortfall to repay the mortgage debt in full.

Your financial situation - the amount you earn and your long term goals - are unique to you. But no matter what your situation or which home loan you think is right for you, I recommend you always take advice from a professional mortgage broker.

Home Loan Advisers are finance industry professionals servicing the home loan market in Brisbane, Gold Coast and Sunshine Coast who can offer advice on a diverse range of loans – at no cost to you. Their focus is to build on-going relationships with their clients, so they will always recommend a home loan product which is right for your situation and professionally guide you through each step of the process to make your dreams of property ownership a reality. Their website has some great online calculators which allow you to make an initial self-assessment.

One of the things you will do in life that is guaranteed to give you sleepless nights or at the very least, moments of panic and anxiety is when you embark on the road to home ownership. The thought of harnessing yourself to a large home mortgage can be daunting.

• How much can I afford to borrow?
• What kind of loan do I need?
• How will an interest rate rise affect me?
• Do I need a variable or fixed interest rate?

So it's imperative that you seek professional advice when choosing your home loan and just as importantly, the mortgage broker that is right for you.

Gone are the days when you needed to do all the leg-work, going from bank to bank, gathering information about various home loan options, and then sitting down at home trying to fill in the forms only to get rejected because you missed something. It's too important and so very easy to get wrong.

Save yourself time and stress - use a reputable

mortgage broker! Look for a broker who works in your local area; someone who will take time to meet with you and who will analyse what kind of home loan will best suit your needs. Remember to check that they are fully accredited with both the Mortgage & Finance Association of Australia (MFAA) and Finance Brokers Association of Australia Ltd (FBAA).

You no longer need to be limited to the range of home loan products that the big banks offer. Choose a mortgage broker who has access to hundreds of different home loan products through banks and non-bank mortgage lenders. They will be able to offer advice on a diverse range of home loans which ensures that you find a loan that gives you all the flexibility, affordability, savings and repayment freedom you need.

Not only do you get more choice but taking the advice of a mortgage broking professional incurs no charge. In fact, the whole purpose of using the services of a mortgage broker is to ideally save you money! So why wouldn't you engage an experienced industry adviser who can give you up-to-the-minute information about new home loan products entering the market?

Mortgage brokers do all the work for you; their client's needs and circumstances get matched to the home loan that suits their unique situation. They offer a complete range of finance solutions that make is easy for their clients to afford what they want, when they want it. They will fully explain all the features, benefits and costs associated with the loan they recommend.

Most of us like to think that we are following green or environmentally friendly practices with our power usage habits. Yet in many cases, if we don’t keep abreast of new technology, we may be missing some of the best and easiest ways to both save power and thus save ourselves a few – or more – dollars.

How can we make sure our power is ‘green’ without going to all the expense of installing solar panels and other power saving inventions? Using one of the latest inventions of modern technology – the green board – will certainly be a step in the right direction. The

green power board has eight power outlets and can be used to both save standby power and electricity consumption.

It has no batteries to worry about and there are no complicated set-up steps to follow, so you don’t have to be a rocket scientist to use it. You simply plug it in to the nearest power point, and then attach all your electrical items to it.

Two USB chargers have been built into the remote switch. This new technology will give your TV a brighter, crisper picture and better sound as well as saving power.

A good feature of the green board is surge protection provided to two of the power banks. These also have extra space for those larger adaptors, so there won’t be the problem of having to unplug one item so that you can squeeze that other plug into the space. It is broadband and fibre optic compatible.

Better still, the green board has a whopping 6-year guarantee and is wholly Australian made and owned. So you know you are supporting Australia when you purchase it. So if you were looking for another way to save on electricity consumption and protect your electrical equipment, the green power board is the way to do it.

Wealth management encompasses all elements of creating wealth including tax reduction as well as investments; implementing business structures; protection of assets, trusts and self managed super funds. A financial planner can help you to put wealth management procedures into place that will meet your financial goals and desires for your future.

Before consulting a

financial planner you need to know exactly what those goals are, but if you find it hard to think through, then they can offer preliminary suggestions to help you. But it is only when they have a thorough understanding of your specific goals that they will be able to devise the right financial plan to suit you.

Strategic wealth management is always tied to planning for tax reduction, because when your tax is legally reduced it naturally increases your wealth. A financial planner can help you in many areas: -

- Setting financial goals
- Saving in order to achieve those goals
- Budgeting in order to save where you thought you couldn’t
- Managing your debt
- Buying a home
- Protecting yourself with insurance - remember you are your biggest asset
- Deciding whether to rent or buy
- Helping to work out what you should put into your super fund to achieve financial goals.

These are just a few examples. There are many other areas where a financial planner can help you.

The majority of us dream of the day we pack in work for good - especially if that retirement also means we have a guaranteed income for life. To some this is an unattainable dream, but it can happen if we take the proper steps beforehand. What do we have to do to make the dream a reality?

Investing in managed funds can be the answer. You don't need a lot of money to invest in a managed fund. Some let you start with as little as $1000, others prefer twice that amount. In today's economic climate, nearly everyone can save that. Even those who have no job can find ways to save a little at a time until they have the necessary amount. So what if it takes a whole year - or even two?

With a managed fund, investors pool their money and the fund manager invests it for them. This is the easiest and simplest way anyone can start to save for their retirement. The profits from the initial investment must be ploughed back into the fund of course, otherwise it will all be spent on present needs or wants. But after a lifetime of re-investing the profits there will be a significant amount to retire on. And those who are wise enough to see the benefits will continue to save for investment purposes so that the initial deposit will swell a great deal over time.

Self-managed superannuation is another option for making the dream come true. This option should not be taken up lightly as there is a lot of work involved with running a self-managed superannuation fund will have to be the trustee and you are directly accountable for everything that happens to the SMSF.

The responsibilities of a trustee are many. There are strict guidelines that you must comply with and failure will bring down the wrath of the tax office upon your head. You must lodge both an income tax return and a superannuation fund return on an annual basis. As well, there must be superannuation member contribution statements lodged every year. An approved auditor must be appointed to do an audit annually. And records must be kept for ten years. There are also restrictions on investments that must be complied with.

In fact, many people feel that the amount of work involved is not worth the benefit and so go with managed funds. Unless you have experience and plenty of time, this is a good decision.

Maybe this is an obvious tip, but sometimes the obvious isn't so obvious to some (If that makes sense)



Always leave your credit cards at home to remove the urge for impulse buying. Leave them in a locked drawer and only get them out when you need to pay for something like an airline booking and then pay it off within the interest free period that most cards offer.

If your card doesn't offer an interest free period, Shop around for a credit card that does.

You've all heard the expression "the rich get richer and the poor get poorer" right?

Well to my way of thinking there is one major difference between financial winners and financial losers.

Winners borrow money at low rates of interest for assets such as property and shares that increase in value as time passes.

Losers on the other hand borrow at high rates of interest on consumables like furniture and cars that decrease in value, in the case of new cars around 20% as soon as they leave the showroom.

While interest rates are at the lowest they have been in years do the right thing (if you are able) and borrow some money to invest in quality assets.

Aren't you glad that the end of the financial year doesn't come at Christmas time? Instead, June rolls around and we have to be prepared for all the extra work necessary to sort out our finances. But why not be a wise owl and get in ahead of time? You can save yourself a bit of stress by being prepared. Get all your receipts to hand and do that bookwork right now. And to start with, how about trying to save money? If you inspect all those phone plans and electricity or gas and insurance bills you may find that switching to another provider can save you heaps. Of course, you know to always read the fine print so you don't sign up for something unpleasant.

You can often save in the home, too by donning warmer clothes before turning on the heater or working with the weather to dry clothes instead of using that convenient but costly clothes dryer. Looking at your saving accounts is another way you may be able to save money and make more interest. Online savings accounts are often fee-free and give wonderful rates of interest compared to ordinary savings accounts.

If you've been putting off buying that new monitor or printer for your business, remember that it is tax deductible. But there have been recent changes to what you can claim, so check that out too.

An emergency fund is good insurance

You may have gone to a lot of trouble to work out a budget so you know just what bills are coming in and how much you'll need to pay them. Then you feel that anything left over is yours to spend how you like. That is true of course; you've earned that money and so you have the right to spend it.

But before you go out and blow the lot on a party or the latest electronic gadget, remember that life has a habit of taking some unexpected turns. And usually money is needed to cover the costs. If you have only enough cash set aside to pay your expected bills, what happens when you get an unexpected one? Your water heater could suddenly develop a serious leak, the car may need unexpected repairs, or illness may keep you from working for some months.

If you've set aside money in an emergency fund such as a savings account or short term deposit, you won't need to worry how you'll cope financially. Sure, you feel that your credit card will get you out of any financial hole, but don't forget you have to pay that back. And if you don't pay it in time, you'll get hit with the highest interest there is. Using a credit card to cope with unexpected bills could well be digging a financial hole that it is very difficult to climb out of. So creating a special fund to cope with emergencies is a sensible thing to do.

The recent $93 million lottery draw got me thinking if buying lottery tickets is the best way to a better lifestyle.

Do you buy a lottery ticket every week - or more often - in the hopes of winning the big one? Do you constantly dream about what you will do when you finally win the lottery? Take a trip, buy a new car or house, and help out the kids? Why leave your finances in the hand of Lady Luck who is known to be so fickle?

While we know that someone has to win, the chances of winning a significant amount of cash in a lottery is really poor. In fact, experts tell us we have less than three one-hundredths of one percent chance of winning a lottery.

Instead, tot up the amount of money you spend each week on lottery tickets; it might surprise you just how much it is. Especially if you multiply that weekly amount by 52 to see how much you spend in a year. Now multiply your yearly amount by 5 to see how much you'll have spent in five years.

Add about 8% to that total to see how much you would have got if you'd saved that amount in a term deposit instead of spending it. Of course it won't be quite accurate, because you would have to start off with just your first little weekly total, but savings mount up over time. And you don't have to depend on Lady Luck for your increase.

A stock warrant is a certificate issued by companies that gives the holder the right to buy a certain number of shares at a particular price within a specified time frame. There are two different kinds of stock warrants. One is called a call warrant and that is the one just mentioned. The other is called a put warrant and gives the holder the right to sell a specified amount of equity back to the issuing company within a certain time frame. On each stock warrant certificate will be written the expiry date, which is the last day that the buy or sell may take place. There are two classes of stock warrant certificates; those whose equity can be bought or sold at any time within, up to and including the expiry date, and those where the buy and sell equity can only be exercised on the actual date of expiry.

While a stock warrant mostly represents shares in a company, it can also represent other investment types such as currency, index or commodity. When the stock warrant is bought or sold, the price paid is called the exercise or strike price. It is usually much lower than the normal price of the shares represented. The stock warrant is a high-risk, high return investment tool. Those considering investing in stock warrants should realize that their losses can be much greater if things go wrong than if they invested in ordinary shares.

A cash management trust is an investment vehicle that provides returns for investors by buying into short-term liquid assets such as interest bearing securities and bank bills. The concept was first introduced in Australia in 1980 by the Macquarie Bank and became a popular means of investing due to the soaring interest rates.

Previous to this it was only those investors who had hundreds of thousand of dollars to invest who could use a cash management trust for investing. Nowadays cash management trusts are available to investors with just a few thousand dollars as their money is pooled with many others - as it is with other kinds of managed investments.

The cash management trust is suited to investors who prefer low risk, liquidity and capital security. There are attractive returns and the investors have ready access to their funds and a regular savings plan.

Management fees and costs incurred by the investors are expressed as a percentage of the fund’s net asset value, but this does not include brokerage costs. As with all other investments, those wishing to take advantage of a cash management trust should research carefully to make sure it is suited to their needs.

Most of us have heard of interest. That's what you have to pay when you get a loan. That's what makes it so hard to pay back the loan when the interest rates keep on rising! Ah yes, and that's the measly little bit of extra money the bank gives - grudgingly, it appears - when we have a few bucks saved up. But wait! It's not as bad as it seems.

Those two magic words "compound interest" that Einstein referred to as the world's greatest discovery are put to work for us when we have a savings account. But those of us who have just a few hundred dollars don't seem to notice it all that much. That's because it shows up better on larger amounts - and if you don't keep withdrawing. These days most savings accounts work on compound interest.

The interest that you earn on your $100 may not seem much, but it is added to the balance, and then in the second year interest is paid on that total, rather than just on your original $100. So you are basically getting interest paid on your interest. When this keeps on every year - as it does, so long as your keep your savings account going, then that total really begins to add up.

The research study by Celsius Research of online savers, commissioned by RaboPlus, the online banking division of AAA rated Rabobank Australia Limited, shows men are more disciplined about their savings than women, and are saving more each month.

The research also found that 83% of respondents claim that a better ongoing interest rate from another institution would prompt them to shop around for a better savings product and males (21 %) were more likely than women (9%) to be lured by cash incentives, and promotional rates (39% compared to 27%).

Do you agree that men are better when it comes to saving money?

If you think you will have enough money to retire on think again. You may have, of course, but unless you know for sure it’s time to analyse your retirement plan and your investments. In these days of longevity, it may be that you will actually outlive your nest egg unless you do something drastic to prevent that happening. Do something drastic to your savings, that is.

The best thing you can do is add more money to them. While this may not be easy, there is nearly always some way you can cut costs or get a little bit more money. If you go for cutting costs, then don’t forget to save what you cut off your bills, don’t just go out and spend it on something else. It is quite possible to do this subconsciously if you have an attitude of rewarding yourself for all that cutting back. A coffee out here and a meal out there, plus that new tool you’ve been wanting for ages all add up very quickly.

Postposing your retirement, or going into part-time work so that you can add to your super or other savings may be the way to go. Or if you are lucky enough to have an investment home that is not as good as the one you live in, consider swapping for a few years. You could live in your investment home and lease out your fancy one for a great deal more money.

Another way to save money is to downgrade your present standard of living. Forget that holiday, stay home more often, and cook in instead of eating out. Every little bit counts and the more you save now, the better off you will be later on.

Don’t forget that if you retire in your early sixties you may have another thirty or so years to live. Will your retirement investments last that long? There could easily be rising health costs and of course there is always the rising cost of living to consider. Retirement planning is so necessary.

To find out what you’ll probably need to live on once you retire, add up all your present costs, leaving out such things as payments that you will be finished with when you retire e.g. mortgage or car payments. Then add up all your sources of income that you’ll get when you retire. Subtract your costs from your income and whatever is left will be your retirement income - approximately.

If it is not enough then you need to put Plan B into action immediately.

Managed funds are also known as unit trusts. Their attraction is that they offer a great deal more diversification than you could manage if investing with a smaller amount of money. This creates a diversified portfolio that can be considered much safer than one with fewer investments. Diversifying is one of the best ways to minimise loss when investing.

While you may not have day-to-day control over your money in a managed funds, you do have the ability to choose what kind of managed fund to invest in, in the first place. You can choose Australian shares only, international shares or a mixture of both. You can also choose the type of risk you are happy with. Growth funds give a better return for greater risk, while those funds that are considered safest have a much slower growth rate.

Another good point about managed investment funds is that they don’t need a lot of work from you. There will be a fund manager - or a team of them - who will look after your money and make all the decisions necessary to ensure the best return possible. No matter what kind of managed investment fund you decide on, you do need to know that there is always some risk. Whether that is small or great is up to you.

Online savings accounts and banking may be a good option for someone who does a lot of financial transactions online. Most ‘brick and mortar’ banks offer online banking, and there are numerous institutions that can only be found online.

The same services can be secured online as at a physical establishment, such as online savings accounts, checking accounts, credit and debit cards, etc., just make sure to check their credentials, for example; is the business a member of the FDIC? There are a number of internet sites that help find appropriate online banks and online savings accounts, they confirm such information as interest rates and monthly balance minimums.

There are other benefits to online banking, such as not having a paper trail, (which means less environmental waste.) The ability to do financial business anytime, from anywhere, usually faster and more efficient than at the counter or ATM, is also one of the benefits. Most online banks are even compatible with Quicken and Microsoft Money, making small business transactions more convenient. If there are trust issues, such as ‘did I click once or twice?’, all internet banking sights offer the option to print off a copy of the transaction and keep it with the rest of the banking documents, so even if a problem does arise, it can be taken care of without difficulty.

Anyone who does a lot of internet transactions, or even just pays their bills online, can benefit from online savings and banking. There are countless online institutions, check them out and see how convenient online banking really is!

It is a common practice for most of us to look for the best deal from any commitment we make but taking time to compare credit cards to choose the best is not practiced by many people; we just pick any card. The fact that credit cards might look the same doesn’t mean they are designed to suit the same needs. Each type of card has some feature incorporated to cater for a particular need. Since we all have different spending habits and different financial plans. In these hard economic times, we should be wary on how we make our financial choices. By comparing credit cards will lead us to choosing the right card that suits our needs.

Always the best card is that which suit your credit behavior and personal circumstances. If you are the type of person who transfers credit card debt to the next month then you are suitable having low interest credit card. Likewise if you are a high spender and clear your balance each month then you might go for high interest credit card that offer some reward programs and grace period.
Sometimes we get into trouble by fail to compare credit cards that we choose. If you can take time to look at different credit cards issued by different banks you will be able to identify different features of various cards e.g. Payment penalties interest rates, balance transfer, purchase interest rates, default interest rates.

Most Australian credit card issuers charge between 7%- 19% interest rates.
Apart from interest rates you will get to know other benefits and feature that different banks offer if you take time to compare credit cards.

Many people these days need financial advice to get out of debt, or to negotiate the tricky waters of finance in their daily lives, including paying off that mortgage while still making ends meet. But who is best qualified to give that advice? Who should they listen to? It could be a friend, or even their grandparents if they are really good at budgeting and so can give the sort of advice that will help them. But when it comes to most financial problems, getting the help of a professional person trained and licensed to give advice in that area is the best solution.

People who have no training may be able to advise on certain aspects of finance, but their advice will certainly be limited. And if an untrained person gives you specific advice about what stocks and shares to buy, or which bank to deal with, then you need to be very wary. What happens if you follow their advice and it all goes wrong? You could easily lose all your money and even if you sue them, it's not that likely you'll get it back.

At least you know that a financial advisor who has certificates to prove he is qualified will be more likely to get it right. And if he is officially working for some financial company then there will most likely be insurance for some kind of protection.

When you invest in stocks and shares you are virtually buying a piece of the company. This saves them the cost of borrowing the money they need and it gives you the right to participate in their success by being paid a dividend at the end of each year, or by the value of your stocks increasing, so that when you sell them you make a profit.

There are two more ways you can benefit financially by investing in stock. Firstly, when you are paid a dividend, it is with money that has already been taxed. Therefore, you receive what is called franking credits that you can use to offset tax you may have to pay on other income. And secondly, if you hold those stocks for more than twelve months, you will receive a 50% reduction on the capital gains tax that you must pay.

Stocks and shares usually have good liquidity - meaning that if you need to, you can get your money out of that investment in as little as three days. When you compare this with the time it takes to get your money when selling real estate for example, you will see that investing in stock is a good way to put your money to work

Share trading is when you buy and sell shares on the stock market. The whole idea of buying shares is to make money, but when you buy and sell you are charged a fee, so this will eat into your profit if you do it too much. Many investors simply buy the shares and keep them for several years. They can make money in two ways; by selling the shares after they have increased in value and/or by getting a dividend from the company they have invested in.

Ideally they would have invested in many more than one company. If an investor only buys shares in one company and it goes bust, then he has lost his entire investment. But if he has invested in a number of companies then he will lose only a part of his investment. Of course, the reverse is true too. If one of his investments does extremely well he won’t get as much out of it as if all his money had been with that one company.

Some investors who know a lot about Share trading - and many others who simply think they do - like to trade shares quickly. That is, they buy shares while they are at a low price, and then sell them once they start to rise. The trick is to pick the right time to sell. Shares can rise and fall at the drop of a hat. If you leave it too long to sell, they might tumble overnight and you will sell at a loss.

But if you sell too quickly the value may keep on rising and you have denied yourself the chance to make quite a bit more profit. This kind of share trading is quite risky. Very few people can accurately predict the market to the correct extent. They risk losing everything they’ve invested and maybe even more. Of course it is also possible to make a great deal of money too.

The best thing to do is think about what sort of risk you are comfortable with and how much money you can afford to lose. This may depend on a number of factors. A person who is quite young will have time to recover his losses in share trading, while an older person may not have that amount of time to spare.

Or you might be lucky enough to have a large disposable income, so you are comfortable with a large risk. You may know quite a bit about investing and so are more likely to make the right decisions at the right time. It really depends on the individual.

There are several different types of investment products on the market and to choose one to suit you, your needs and goals must be thought through carefully. Most stable investments should be for the long term, that is 5 years or more - more is better.
Perhaps the most popular investment product would be superannuation. This is because of the tax savings that are significant and also the fact that the government will add more money for free if you salary sacrifice up to a certain amount. There is a limit, of course, but it is certainly worth the effort. Superannuation can be DIY (do-it-yourself) or done for you. The latter option is the easiest, though many people like the idea of DIY.
Other investment products that are easy to get into are those such as managed funds offered by banks or other financial institutions. All you need to do is create the account and have a minimum deposit in it. Because the money is pooled with that of other investors, these let you diversify your investments a great deal more than if you were investing on your own. Diversification is another word for safety, in investing. But since banks need to make money out of these investments too, your share may not be as significant as if you were doing your own investing. It will, however be safer - so long as you choose the safe option.
A term deposit is an investment product of a simpler kind. Here you simply park your money for your chosen time and then get paid a good interest rate on it when the maturity date rolls around. Even a savings account could be considered an investment product, though the rate of return on most is usually not significant.
A more complex investment product is sometimes quite difficult to understand. All investment products should come with a disclosure statement that tells you how your money will be invested, what returns will be generated and in what way they will be paid to you. If you cannot understand anything that is in the statement, you should seek the advice of a professional or else don’t go ahead with it.
You need to know if you can get your money back early if necessary and if so, what fees apply. If you want to sell your investment, is there a ready market that enables you to do so? And it is wise to choose a product that is issued by a person or company that holds an Australian Financial Services license.
Remember that the better the expected return on your investment is, the higher the risk is likely to be.

Retirement planning is something that many of us put off until it’s almost too late. We don’t like to think about getting old - and certainly not old enough to retire. We want our life to go on forever just they way it is, if not better. And we talk ourselves into believing that it will. But the years pass more quickly than we expected. We get put off our job for someone younger; the promotion we expected simply doesn’t materialise, or we are offered a redundancy package.

Or before we know it, retirement has crept up on us and we are still unprepared. We may have to sell our house because we cannot afford those last payments on it. But we still have to pay rent for somewhere to live. If we are lucky we only have to downsize, but we may end up living in a caravan. All this could have been avoided if only we had planned for our retirement when we were younger.

Retirement planning need not be complicated. It can be as simple as deciding how much money is needed to live comfortably in retirement - and maybe do a few of the things we have dreamed of over the years. Then finding out much you need to save per fortnight to accomplish that. If you are not good at maths, then get a professional to help you.

There has been so much said about the credit crunch lately that casual listeners could be forgiven for thinking that it was some new kind of cereal being advertised. Unfortunately, this is not the case. The credit crunch is well and truly here and looks like staying for some time to come. How will it affect the ordinary man in the street? To find out we first need to know exactly what the credit crunch is.

The credit crunch, credit squeeze or whatever other name you care to give it simply means that it is now much harder to get a loan. This is because banks and other lending institutions have tightened the conditions of lending. When money is loaned, the lender needs to be reasonably sure of getting his money back, plus interest. Therefore, he will certainly not lend to anyone who does not have a steady and reliable source of income. Further, the lender will also be very likely to require a deposit on the loan and will probably not offer the buyer a very good interest rate.

This will affect not only homebuyers, but also those who need a loan to start a business, or they may have started a business but need a loan to expand it. The flow-on effect to the nation’s economy can be felt in every sector.

Estate planning is important to ensure all your wishes and plans for the distribution of your assets are carried out in the event of your death. But it is also important for other reasons. What if you should become mentally incapacitated due to accident, stroke or dementia in the future? Imagine what a burden this would place on family members as they struggle to make decisions for you without your input.

Proper estate planning will include what to do in this possibility. You can have your wishes carried out even though you may be unable to tell your family what you want. Estate planning is the one sure way of making sure your goals for the distribution of all your assets are achieved in the way you wish.

Estate planning comprises a will - if you die intestate (without a will) then the laws of the land will govern what happens to all your assets. This means that if you wanted any part of your assets to go to another source apart from your family, it probably won’t happen. It also means that it will take a long time and probably cost a lot of money for lawyer’s fees, to get your estate settled. A trust may also be used as part of estate planning.

Young people rarely think about retirement; to them it is a time of life in the far distant future - and they are not even sure they’ll live long enough to retire. However, the years do pass quickly and it will seem no time at all before retirement looms ever closer. And it’s a bit late to start retirement planning then.

While you don’t have to constantly think about retirement planning while you are young, you do need to plan for it. Find out how much you will need per year to live on after you retire and multiply it by 25, which is the average length of retirement. Allow for things you might want to do, such as travel. Then find out how much money you will need to have saved up to give you a comfortable retirement.

If you have been actively working for many years, you might find retirement just plain boring; so planning is also needed to make that transition - not just in the financial area. It’s not that easy to suddenly lose contact with all your work colleagues and the stimulus of the working environment, especially if you were happy in your job. You might want to ease into it gradually by working part time. Or you could have many activities planned to keep you busy.

Many people believe it is impossible to build wealth unless you have a well-paid job and no debt, but that is not so. Almost anyone can start building wealth with a little discipline and lots of motivation. There is nearly always some way of saving an extra few dollars, even if it means we go without something we really want. Before purchasing the next item you want, ask yourself if you really need it. Is it necessary for life? If it’s not, maybe you could save the money instead - or use it to pay off that credit card debt.

While no one wants to go back to the days when life was a great deal simpler - no TV, cell phones computers, iPods or MP3 players - it is still possible to have an enjoyable life without most of these things. And the kids would certainly learn to read a lot better. Remember that you usually have to choose between having extra possessions and creating wealth for yourself.

So before you buy that latest gadget or upgrade something that still works perfectly well, think about building wealth instead. Placing that money in a high-interest savings account until you have enough money to invest will certainly begin your wealth creation path. And one day, you’ll be glad you did it.

For those people who are disappointed at the returns their investments are making, there are structured investments to consider. Structured investments are products that are assembled by a team of experts for those who specialize in High Net Wealth and SMSF investments. It is an individual approach to investment creating specialized services for each individual investor. Formerly offered only to top-notch financial planners, the service is now being offered to individual investors.

The components for each product are sourced from the top wholesale financial firms worldwide. The products designed are transparent with the fee structure being reasonable, thus they can easily fit into the client’s day-to-day business.

When you realise that an analysis of traditional managed funds returns has seen the median Australian equity fund under perform its benchmark for 11 out of 15 years, you will see the benefit of structured investments. Structured investments provide total return no matter what returns other managed funds are bringing in. This is because they use structuring techniques and derivatives that provide yield enhancement and capital protection.

Since the whole idea of investing is to gain money, it makes sense to use those types of investments that will give you the best return.