April 02, 2016
With interest rates sitting at record lows, and ongoing speculation about superannuation changes, now is the perfect opportunity for Australians to spend time focusing on their broader financial situation.
Typically, the most important part of your financial portfolio will be your family home. Given that interest rates are very low, its a great opportunity for homeowners to pay down their home loan debt. Additional repayments enables borrowers to reduce the interest they will pay on their loan and helps them to own their property and improve their financial position faster. Do you want to know more or have any questions call us on 0421 206 543
Property investment and the use of gearing is the second aspect that is frequently talked about. Recent changes to investment lending and record low fixed-interest rate loans, it sensible to review your investment property portfolio and exploit opportunities to maximise your wealth over the long term.
Another key aspect of your financial portfolio is your superannuation. Afterall its the money a person will live on in retirement, so its very important to take the appropriate steps to give super a boost. For more guidence on this strategy call us or fill out the form on this page to request a call back.
The following are some tips to assist you in reviewing your broader financial situation and make sure your “nest-eggs” are well protected, and have the ability to grow and flourish.
1. Overpay your mortgage: One of the best ways for Australians to protect their home is to pay off their debt faster. And, with interest rates sitting at historical lows, now is the perfect time to contribute additional funds to a mortgage.
Contributing an extra $100 a month will not only help a homeowner save thousands of dollars in interest over the life of their loan, but it can significantly slash the loan term period. Even one-off extra repayments can make a significant difference to the length and overall cost of a home loan.
2. Consider fixing your investment property loans: With the cash rate so low, considering a fixed rate interest-only loan for your investment property will assist you in locking your interest payments for the next 1-5 years, and insulate you from any rate fluctuations in the future.
While these type of loans may not offer all the features needed (such as the ability to contribute extra payments and redraw them, or the use of an offset account), they still play a critical part in maximising your wealth by containing the cash outflow on your deductible debt.
3. Give your super a boost: Making salary sacrificed superannuation contributions offers Australians a simple way to save on tax and build wealth.
Salary sacrificed super contributions allows Australians to pay part of their before-tax salary into their super rather than taking the money as cash in hand.
These contributions are taxed at 15%, which is likely to be below a person’s marginal tax rate (which could be as high as 46.5%), so more money goes towards growing their super rather than paying the tax man.
Up to $30,000 annually can be added to super through pre-tax contributions ($35,000 if aged 60-plus). This limit includes an employer’s compulsory contributions.
4. Insure major assets: A person’s income is their biggest asset, so it makes sense to protect it. While the majority of superannuation funds offer some level of income protection cover, this cover is often not adequate. It is important for Australians to do their due diligence and make sure whatever income protection insurance they currently have is adequate. If it isn’t, it is vital that they do something about it, before it is too late.
Even if you’re pretty financially savvy, our mortgage broking service coupled with our financial planner expert are available to help you get ahead and make your money work harder and ultimately achieve your financial goals sooner.
Call us today on 0421 206 543 or fill out our online form for a call back