How To Grow Your Wealth? Complete Guide.

How to Grow Your Wealth???

Complete GuideFinance Blogs - By Personnel Concept

Avoid buying stuff you will never Use!

• First thing to learn: Stop wastage!

• $1250 – Estimated amount Australian households spend each year on items they don’t use.

Hi DINKS! (Double Income No Kids)

Best advise financial advisers might give - • Try to boost your wage, • protect your income cheaply (insurance), • protect your debts (life insurance) and • pay as much off your house as humanly

possible before you have kids, to make the most of your double income and your savings!

Renting or Buying ?• It’s a big decision! • Achieving a dream of buying personal home or Sense of personal security

will definitely play part in it but make sure you also make this decision based on some calculations.

• The annual cost of owning a home is normally much more than the cost of rent; there are mortgage repayments, rates and ongoing repairs.

• However, you hopefully have the benefit of a tax-free capital gain on your asset, provided there have been positive gains in the market between the times you buy and sell.

• Another important factor to take into account when buying a house though is the cost of stamp duty, removalist fees and insurance, which can run into the tens of thousands.

Also Checkout: A Guide to Property Investment

Buying New property

Positives:1. Requires little effort.2. Lower maintenance.3. Builder’s insurance can cover any cost involved

if any defects.4. Easy to Rent !

Negatives:5. High Cost of buying .6. It takes longer to realise capital growth.

Also CheckoutSydney to lead Housing Market Recovery in 2014

Buying old Property

Positives:1. Less price fluctuations.2. Room to add more value through renovation.

Negatives:3. High maintenance 4. Loss of rental incomes during renovations.5. Not easy to rent6. Lower rent than new property 7. tax benefits may not be as significant, due to lower depreciation values.

Also CheckoutSydney to lead Housing Market Recovery in 2014

Purchasing Property Off-the-planPositives: 1. Stamp duty payable on the purchase often reduced because the property is not yet completed.2. potential to secure the property without putting any money down.3. If the property is not completed for a couple of years, this is a much cheaper option and allows you

the flexibility of using your cash for something else.

Negatives:4. Property may have dropped in value by the time its completed!5. With large developments, if a certain percentage of the properties are not sold before construction,

there is no guarantee the project will start, which means you may have lost valuable time and missed out on other opportunities.

While the traditional view has been that Australians prefer houses with a big enough backyard to play cricket in, apartments, townhouses and units are becoming increasingly popular due to rising prices and changing needs.

Also CheckoutSydney to lead Housing Market Recovery in 2014

Benefits of Investing in Australia

• Stable Politics & Economy – Australia consistently ranks highly for political stability and government efficiency, while housing strong banks and a great fiscal balance sheet.

• Solid Legal Frameworks – Australia has strong corporate governance laws that ensure ethical behaviour, as well as efficient legislation and intellectual property protection.

• Natural Resources & Location – Australia is situated next to the fastest growing regions in the world and remains one of the largest coal producers in the world.

Also Checkout :Australia Rated Best Place To Live

Source: http://abt.cm/17IEKAQ

Risks of Investing in Australia

• Dependence on Commodities – Chinese demand for natural resources has been responsible for a large amount of Australia’s growth.

• Higher Taxes Possible – Australia has been debating a so-called resource taxes and carbon taxes that could raise the cost of doing business for many Australian companies.

• Persistent Deficits – Australia has run a current accounts deficit for more than 50 years, which could become a problem if its commodity sector falters.

Also Checkout:The Real Estate Market and Property Jobs in Australia

Source: http://abt.cm/17IEKAQ

Budgeting• Budgeting is essential tool to help you manage your personal

finances & cash flow. • Budgeting requires you to list all your sources of income and all of

your outgoing expenses.• Do some calculations on how much you can save every

week/month. And stick to those savings!• It’s best to prepare a budget based on your pay cycles.• If you have access to a computer, a spreadsheet is the best way to

set up a budget.

Also Checkout:5 Benefits of Hiring a Financial Advisor

Consolidate multiple Accounts!

• Avoid having multiple accounts (Bank account/credit cards/ Super accounts etc.) because every single account is costing you a fee.

• Consolidate your accounts to avoid paying that extra fee for each account.

• Tip: Many Super funds have different investment options, make use of them. Invest at different places but keep the same Super account!

Make Smart Use Of Credit Card!

• Take benefit of interest free periods. • The key to using credit cards to your advantage is being able to

repay the balance in full every month. That means you get maximum use of your funds, for example, in Reducing mortgage repayments if the card is linked to a home loan.

• However, interest is super high if you go past the interest free period!

• Tip: You may want to use a direct debit from your bank account so bills are paid off automatically with no risk of forgetting.

Find a good Financial Adviser!• A good adviser will explore where you are now financially, where you

want to get to and your options to get there.

• An adviser may find ways to reorganise your finances immediately to help your finances.

• Note: Check that you have a qualified financial adviser who is tailoring advice to your needs, not someone interested only in selling an investment product.

Also Checkout:5 Benefits of Hiring a Financial Advisor

Salary Sacrifice• Saves tax!• Rather than an employee paying their expenses from their take home or

post-tax salary and wages, they may be able to have some of these expenses paid from their pre-tax salary by their employer.

• This effectively reduces the employees assessable income and therefore the amount of income tax payable.

• Tip: You should seek professional advice if considering this strategy. You will also need to check with your employer as to what you can do and the extent that you can package as each employer has its own policies.

Also Checkout:5 Benefits of Hiring a Financial Advisor

Clear debt that’s making you suffer.

• Debts can be of any type, such as home loan, car loan, credit card debt.

• Not all debts are necessarily bad! ..particularly the debt used to buy an asset that appreciates in value.

• Some take advantage of easily available credit to take one or more credit cards.

• This is far more dangerous debt! .. .as the interest payable is often two or more times higher than for home mortgage debt and the purchases are usually consumable items – not assets which have the potential to increase in value.

• So get rid of such debts.

Get Insurance via Super• Provided you are able to meet any estate planning needs, there can be real

savings to buying insurance through your superannuation! …• as the premiums are paid from your contributions, which have normally been

taxed at a lower rate than if they had been paid from salary and wages.

• Note: There are estate planning needs that should be taken into account first, as you have less control over where your funds go if your insurance is part of a superannuation policy.

• There are also possible tax liabilities for the recipients if they are non-dependants, such as adult children.

• You should determine all these aspects before pursuing this cost-effective insurance strategy.

Also Checkout: Superannuation Changes 2013 More Super For You

Alternative Investments• Alternative Investments is an umbrella term which means any Investments

other than stocks, property, bonds and cash.

• Types of alternative investments: Hedge funds , managed futures, insurance-linked securities and private equity

• They do not follow the traditional approach of purchasing stocks, bonds or property in the hope that they will rise in value. Instead, alternative investments invest in a much broader range of assets and do so using dynamic and flexible investment techniques.

• Alternative investments offer investors the opportunity to better diversify their investment portfolios. This ‘don’t put all your eggs in one basket’ principle of diversification can help a portfolio to produce consistent returns, even in difficult market conditions.

Attend Financial Seminars

• Department of Human Services holds financial education seminars across Australia.

• They aim at young people who want to know how to save, invest, and how to prepare for retirement.

• Seminar Topics: Age pension, running your own super fund, salary sacrifice, reducing your mortgage and understanding shares.

Find out more at www.humanservices.gov.au Source: CPA Australia

List of Useful Articles

• A Guide to Property Investment

• Tips for First Home Buyers

• 7 Way to Make Smart Use Of Your Tax Return-

• 5 Benefits of Hiring a Financial Advisor

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