Many Australians are struggling to repay their debts. According to The Australian, many more are dealing with rising interest rates easily because they have made provisions for the higher repayments, or never lowered their repayments when interest rates were falling.
Experts recommend that bad debt (incurred when a person buys things that depreciate in value, such as a car, shopping or a holiday) needs to be repaid as fast as possible. This type of debt does not help you to increase your wealth. Furthermore, interest rates on credit cards or personal loans can attract between 9 - 20% in interest charges. Good debt on the other hand, such as a mortgage to buy a house, or a loan to make an investment can increase wealth because the assets may rise in value.
If you need help consolidating debt, budgeting, debt management or would like more information about building wealth, speak to one of the financial advisors at Intellichoice today on +61 7 3624 1900.
Wednesday, April 21, 2010
Monday, April 19, 2010
Aussies are still wary of credit
Despite increasing confidence about the economy, many Australians are still reluctant to increase their credit card debts.
"People are still more inclined to use their own money to make purchases rather than put it on credit," Commsec chief economist Craig James said.
Datamonitor senior analyst Harry Senlitonga said use of Visa and Mastercard debit cards was up 30% in the past 12 months, compared to 6.69% for credit cards. "Debit scheme cards give consumers the best of both worlds - accessibility of a credit card and they allow the consumer to use their own money," said Mr Senlitonga.
"People are still more inclined to use their own money to make purchases rather than put it on credit," Commsec chief economist Craig James said.
Datamonitor senior analyst Harry Senlitonga said use of Visa and Mastercard debit cards was up 30% in the past 12 months, compared to 6.69% for credit cards. "Debit scheme cards give consumers the best of both worlds - accessibility of a credit card and they allow the consumer to use their own money," said Mr Senlitonga.
Friday, April 16, 2010
New tax break for savers
The federal government is considering a new savings scheme that will encourage more people to put money away for years into high interest rate bank accounts. The idea is believed to come from the Henry Tax Review, which is yet to be released by the government.
The new savings scheme could offer significant tax breaks for savers - similar to a superannuation’s tax break which gives super investors a low tax rate of just 15%. Some taxpayers now pay 50% tax on the interest earned on their savings.
The new savings scheme could offer significant tax breaks for savers - similar to a superannuation’s tax break which gives super investors a low tax rate of just 15%. Some taxpayers now pay 50% tax on the interest earned on their savings.
Wednesday, April 14, 2010
Intellichoice Financial Planning ties up with one of Australia's leading investment management groups
Intellichoice Financial Planning is proud to announce an alliance with one of Australia’s leading mortgage investment management group, La Trobe and offer clients the opportunity to invest in Australia’s best Mortgage Fund, as voted by Money Magazine.
A mortgage fund essentially takes investors’ money and uses it to make loans secured by mortgages or buy existing ones. You as an investor receive the net interest payments on those mortgages. These loans can be secured by mortgages over retail, commercial, industrial or residential properties.
Darin Hindmarsh, Managing Director of Intellichoice says ‘investing in a mortgage fund can consistently earn you between 7% and 15% depending on the degree of risk.’
‘This rate of return compares very favourably when compared with other forms of investments. For example, the average return on government bonds is 1.6% and 3.4% based on 1 year and 5 years respectively.’
Intellichoice has formed a relationship with La Trobe because of the strength and stability of their mortgage fund options. Their Pooled Mortgages Option has been recognised as Australian Best Mortgage Fund by Money Magazine, winning the 2010 Best of the Best Award.
A unique feature of the La Trobe Fund is their ‘Select Investments’ which means before you invest, you and your Intellichoice financial planner can review the details of the borrower and the proposed loan, including investment term, interest rate and payment terms together before you make the decision to invest or not.
‘A great feature of investing in a mortgage fund through our alliance partner is that you only need a minimum investment of $1,000, so you have all the advantages of being “the bank”, without having to fund the entire mortgage’ says Hindmarsh.
To find out more about mortgage funds and whether this is the best investment option for you, speak to one of the financial planners at Intellichoice today on +61 7 3624 1900.
A mortgage fund essentially takes investors’ money and uses it to make loans secured by mortgages or buy existing ones. You as an investor receive the net interest payments on those mortgages. These loans can be secured by mortgages over retail, commercial, industrial or residential properties.
Darin Hindmarsh, Managing Director of Intellichoice says ‘investing in a mortgage fund can consistently earn you between 7% and 15% depending on the degree of risk.’
‘This rate of return compares very favourably when compared with other forms of investments. For example, the average return on government bonds is 1.6% and 3.4% based on 1 year and 5 years respectively.’
Intellichoice has formed a relationship with La Trobe because of the strength and stability of their mortgage fund options. Their Pooled Mortgages Option has been recognised as Australian Best Mortgage Fund by Money Magazine, winning the 2010 Best of the Best Award.
A unique feature of the La Trobe Fund is their ‘Select Investments’ which means before you invest, you and your Intellichoice financial planner can review the details of the borrower and the proposed loan, including investment term, interest rate and payment terms together before you make the decision to invest or not.
‘A great feature of investing in a mortgage fund through our alliance partner is that you only need a minimum investment of $1,000, so you have all the advantages of being “the bank”, without having to fund the entire mortgage’ says Hindmarsh.
To find out more about mortgage funds and whether this is the best investment option for you, speak to one of the financial planners at Intellichoice today on +61 7 3624 1900.
Deposit rates still at record highs
Savers can still benefit from historically high term deposit and savings account rates.
Term deposit rates in Australia are now over 7% at some banks and credit unions.
Term deposit rates in Australia are now over 7% at some banks and credit unions.
Tuesday, April 13, 2010
A bumpy ride for 2010?
That is what it may feel for some of us over the next twelve months according to sources at UBS. With the amount of deleveraging (big word for not being able to refinance debt) in the markets overseas, it will obviously cause a lot of jitters globally. What it means to you and I is the markets are more volatile over the coming year.
What are you doing to counter this? Well it seems over four hundred thousand Australians have decided the managing their own future through self managed super funds (SMSF) is the way to go. This may in part come from the belief that if anyone is going to lose your money it may as well be you! Not an entirely unfair statement considering that SMSF’s outperformed the major funds by 3% last year.
It may be worth recalling exactly what the different super funds are available and quite simply you have three options:
1. Retail Funds/Master Trusts
These types of superannuation funds are owned by Banks and major fund managers. They have more investment options with less exposure to alternative assets. Alternative assets are direct property, infrastructure etc. The benefit of more choice is that the individual can tailor an investment strategy aimed at achieving their long term goals. Colonial First Choice as an example, has a choice of 106 options.
2. Industry Funds
These super funds are generally not for profit funds established for the benefit of the members. They have limited investment options. For example, AustSafe has 9 choices.
3. Self Managed Super Funds (SMSF)
As the title states these are super funds where the individual makes the investment decisions in line with government legislation. Generally the individual feels they have control and can achieve a better outcome than the so called professional.
What is best for me?
There are enough options to make Super and preparing for the future a confusing situation. However, more and more people are paying attention to this particularly due to the ups and downs we have experienced over the past eighteen months and the likelihood of more volatility to come.
The super fund that best suits you will depend on issues such as age, your acceptance or understanding of volatility, your investment strategy and also time to retirement. As with many things in life there is not a one size fits all option. We strongly suggest you review your current arrangements sooner rather than later as Super will affect many aspects of your financial future.
If you need help with superannuation or if you are thinking of setting up your own self managed super fund, speak to one of the financial planners at Intellichoice today on +61 7 3624 1900.
What are you doing to counter this? Well it seems over four hundred thousand Australians have decided the managing their own future through self managed super funds (SMSF) is the way to go. This may in part come from the belief that if anyone is going to lose your money it may as well be you! Not an entirely unfair statement considering that SMSF’s outperformed the major funds by 3% last year.
It may be worth recalling exactly what the different super funds are available and quite simply you have three options:
1. Retail Funds/Master Trusts
These types of superannuation funds are owned by Banks and major fund managers. They have more investment options with less exposure to alternative assets. Alternative assets are direct property, infrastructure etc. The benefit of more choice is that the individual can tailor an investment strategy aimed at achieving their long term goals. Colonial First Choice as an example, has a choice of 106 options.
2. Industry Funds
These super funds are generally not for profit funds established for the benefit of the members. They have limited investment options. For example, AustSafe has 9 choices.
3. Self Managed Super Funds (SMSF)
As the title states these are super funds where the individual makes the investment decisions in line with government legislation. Generally the individual feels they have control and can achieve a better outcome than the so called professional.
What is best for me?
There are enough options to make Super and preparing for the future a confusing situation. However, more and more people are paying attention to this particularly due to the ups and downs we have experienced over the past eighteen months and the likelihood of more volatility to come.
The super fund that best suits you will depend on issues such as age, your acceptance or understanding of volatility, your investment strategy and also time to retirement. As with many things in life there is not a one size fits all option. We strongly suggest you review your current arrangements sooner rather than later as Super will affect many aspects of your financial future.
If you need help with superannuation or if you are thinking of setting up your own self managed super fund, speak to one of the financial planners at Intellichoice today on +61 7 3624 1900.
Monday, April 12, 2010
Bank fees cost $50/week
Bank fees are costing the average Australian about $50 per week. Even low income earners, (on $50,000 and below) are paying about $30 per week in bank fees and charges.
According to new research from the Australia Institute, in 2009, the Commonwealth Bank, Westpac, National Australia Bank and ANZ racked up $35 billion in profit. Bank charges were being passed on by businesses in their prices to customers and could be costing households more than $50 a week.
In the year to September 2009, banks earned fees and commissions worth $19.829 billion. The Australian Bankers Association disputed much of the report and said bank profits were largely derived from superannuation, insurance, institutional transactions, and offshore activity.
According to new research from the Australia Institute, in 2009, the Commonwealth Bank, Westpac, National Australia Bank and ANZ racked up $35 billion in profit. Bank charges were being passed on by businesses in their prices to customers and could be costing households more than $50 a week.
In the year to September 2009, banks earned fees and commissions worth $19.829 billion. The Australian Bankers Association disputed much of the report and said bank profits were largely derived from superannuation, insurance, institutional transactions, and offshore activity.
Thursday, April 1, 2010
Gen Y not coping with debt
Generation Y, (people born between 1980 and 1994), have developed a reputation for not being responsible with money says social researcher Mark McCrindle.
McCrindle says that there has been a big rise in the number of 19 year olds declaring bankruptcy. Many Gen Y’s make good income but waste their money on cars, clothes and leisure/entertainment and are not concerned with investing for their future.
For help with debt management, debt consolidation or budgeting, speak to a financial advisor at Intellichoice today on +61 7 3624 1900.
McCrindle says that there has been a big rise in the number of 19 year olds declaring bankruptcy. Many Gen Y’s make good income but waste their money on cars, clothes and leisure/entertainment and are not concerned with investing for their future.
For help with debt management, debt consolidation or budgeting, speak to a financial advisor at Intellichoice today on +61 7 3624 1900.
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