July 19, 2018

Phil Waugh is an ambassador of the R U OK campaign, which seeks to encourage all Australians to meaningfully connect with people around them and support anyone struggling with life. He talks about the power of conversations to change lives for the better.

He was as tough as nails on the rugby pitch, playing at the elite level for the NSW Waratahs and Wallabies for over a decade. But beneath the hardened exterior of perhaps one of rugby’s greatest openside flankers, lies another side to Phil Waugh; an advocate for the emotional and mental wellbeing of all Australians.

And with an annual price tag of $60 billion being spent on mental ill health, it’s a cause close to Phil’s heart.

“Good mental health and wellbeing underpins the way we go about doing everything in our lives; it underpins the way you live your life, every minute of every day. So, for me, it’s very important that people spend the right amount of time to ensure they are in the best possible mental state,” Phil says.

Yet, despite...

February 25, 2018

IF YOU TAKE a long, wide view, marriage and personal relationships are in fine shape. Parental coercion is weakening; marriages are becoming more egalitarian; enormities such as child marriage are fading. Even in countries where divorce is common, most marriages last. A couple who tied the knot in England or Wales in 2012 can be expected to stay together for 32 years, according to the Office for National Statistics. By contrast, the average pre-industrial English marriage endured for just 15-20 years before one partner perished. The vows in the Anglican wedding service, in which couples promise to love and cherish each other “till death do us part”, used to be laden with doom.

Nor, if only the couples are considered, is the spread of cohabitation anything to worry about. Fewer people have jobs for life these days, or even careers for life, so it seems odd to expect them to leap into lifelong romantic commitments. Demographers used to argue that living together before marriage raised the...

February 19, 2018

Financial planners divide debt into two types: deductible debt and non-deductible debt.

Deductible debt lets the borrower claim a tax deduction for the interest incurred on the debt. Non-deductible debt does not. Whether interest is deductible or not can have a massive impact on how expensive that debt actually is.

When interest is not deductible, you have to pay tax before you pay the interest. You can see this with an example: If your nominal interest rate is 5%, and you are a 45% taxpayer (the highest tax bracket), the effective interest rate around 9% before tax. To understand this, consider an interest bill of $5000. A person paying tax at 45% has to earn $9000 in order to pay this bill. Of this $9000, they pay $4050 in tax to the tax office, leaving (virtually) $5000 remaining to pay the interest.

When interest is deductible, you don’t have to pay tax before you pay the interest. So you only have to earn $5000 to pay an interest bill of $5000. Here is the effective rate of interest...

December 17, 2017

I'm always looking for ways to add protein to some of my favourite meals. This is a great breakfast packed with plenty of protein. Depending on what kind of sports you play you add few extra toppings for some extra calories.

1 Scoop of protein powder

1 Egg (if using protein powder)

Blend until pancake batter consistency

Cook in a pan on a medium heat and top with peanut butter, greek yoghurt and fruit!\

CALORIES (no toppings/fillings): 221



FATS: 7g

December 12, 2017

2017 is drawing to a close and we wish you all the very best good fortune of the season. Thank you for being part of our journey in 2017. May this summertime solstice be a peaceful one for you and your loved ones.

During 2017, Australia took the record for the longest period without a recession – 26 years. The signs are strong that 2018 will continue this great run. This record run is a combination of good luck and good management. So, we thought we would end the year by listing out lots of other lucky things about living in Australia. These ‘facts’ have all been sourced from the Internet, so you can be absolutely sure that they are reliable.

  • Australia has three times as many sheep as people;

  • There are also more kangaroos than people in Australia;

  • Perhaps unsurprisingly, the world record jump by a kangaroo is held by an Australian. The record is 9 metres;

  • This record may or may not have been held by the largest kangaroo ever seen. This kangaroo was also an Australian a...

November 6, 2017

Christmas is coming and you probably know someone who is really hard to buy a present for. You might be tempted to buy them a gift voucher. Can we suggest you think again? Unfortunately, gift vouchers are generally a really bad idea. We know, we know – we sound like the Grinch. But let us explain.

You’ve probably heard of the Nobel Prize. This year’s peace prize was awarded to an Australian organization, founded in Melbourne 10 years ago: the International Campaign to Abolish Nuclear Weapons. Well done to all involved!

The Nobel Prize is also awarded for economics. The 2017 award went to an American economist named Richard Thaler. Thaler is a ‘behavioural economist’ – which means that he studies the way people think about their money. If you ever get the chance, read some of his stuff or listen to a podcast. He is a very funny man.

Thaler is best known for identifying a phenomenon known as ‘mental accounting.’ Mental accounting is where people link a specific dollar with a specific purpos...

October 23, 2017

This week we continue our theme of inter-generational financial planning. We turn our attention to the very young members of your family.

Unfortunately, the school system is not that great when it comes to teaching kids about managing money. So, if you have kids of your own, teaching them how to manage their money is your job. We want you to enjoy your parenting, and we want your kids to enjoy managing money. So here are our top tips for teaching kids about money.

Understand that they are watching you. Managing money is not just about words and numbers. Many things affect whether a person manages money well. These include things like temperament, personality – and whether people learn to spend money in order to feel better. (Retail therapy, anyone?)

Guess where kids learn about this ‘emotional’ side of managing money? By watching their folks at very close quarters for the first couple of decades of their lives. Like it or not, your kids will grow up to be very similar to you and their oth...

October 9, 2017

Here is a troubling statistic: in the eight years from 2006 to 2014, the wealth of Australians aged between 65 and 74 increased by an average of $200,000. That sounds good. But the wealth of Australians aged between 25 and 34 decreased on average over the same period. (source: the Grattan Institute).

This increase was entirely due to older people being more likely to own homes – and more likely to own those homes outright (that is, with no debt) – than their younger counterparts.

Unfortunately, in many places, since 2014 the differences have simply gotten worse, as house prices continue to rise. While older people probably enjoy the fact that their wealth is increasing through no effort of their own, 80% of people are parents. This means that most older Australians have children and grandchildren who may be struggling to buy a home – and perhaps especially to buy a home near grandma and grandpa.

Of course, eventually those children and grandchildren will inherit the wealth that...

September 25, 2017

Sometimes people really do win the lottery. But here is a story of someone who won the lottery twice.

We recently came across a genuine good news story. A woman just approaching aged pension age won a substantial amount in a national lottery. She needed the money! Before the win, she was living on the disability support pension and had no personal assets other than her car. She was renting her home, and spending the rest of her life on the pension was what she was expecting.

And then her lucky numbers came up. Happily, following a friend’s recommendation, this lady went to see her adviser. As it turns out, this was like winning the lottery for a second time!

The lucky winner had hatched a plan: she was going to use $300,000 to buy what is, in fact, her first home. This would then leave her with about $450,000 in cash. As she had never owned a home, she thought $300,000 was a lot to spend – and it would buy her quite a lot of house in the town in which she lives.

This was not a bad plan. Bu...

September 18, 2017

Marriage automatically revokes a will, unless the will specifically contemplates the marriage and names the intended spouse. So, if you are contemplating a marriage, or you have had a marriage and have a will that pre-dates that marriage, you need to get yourself a new will.

Wills for a second (or subsequent) marriage are typically more complex than wills for clients who are in or are contemplating or still in their first marriage. This is due to things such as the presence of children from previous relationships. These children often need to be catered for separately to any children of the current marriage (or relationship).

In a first marriage, where mum and dad have children together, the wills are typically the same for each parent: if they die, everything goes to their spouse. If they both die, everything goes to ‘their kids.’ In the case of each parent, ‘their kids’ means the same people – because the parents have kids together. In cases like this, it does not really matter which p...

September 4, 2017

Superannuation is an area that is often forgotten or misunderstood in the estate planning process.

A super fund member cannot just sign a will and assume that their super benefits will automatically be paid in the way set out in their will. The super fund trustees are not bound by the deceased member’s will and may pay the benefits to either the deceased member’s estate or to appropriate dependants as they see fit.

In most cases problems will not arise. But problems can arise, for example, in same sex relationships, with “hidden” or multiple relationships, with “warring” children, and so on.

Moral and legal factors which may influence a super trustee’s discretion to pay a benefit to a person include:

  • the relationship between that person and the deceased member;

  • the person’s age and ability to look after themselves financially;

  • the extent of the person’s dependency;

  • the person’s financial circumstances;

  • the history of the person’s relationship with the deceased membe...

August 21, 2017

Being self-employed requires an entirely different ‘mindset’ to being an employee.

In our own experience, and in our observations of other business owners, a number of particular attitudes need to change if we are to succeed at – and enjoy! – running our own business.

The main change in attitude is to ‘let go’ of the relationship between time and reward. If you are an employee, you make a basic deal with your employer. You sell them your time. They use that time to get the work done. But if the work cannot be completed in the time allotted, the employee does not have to do it. Yes, if a conscientious employee will usually be happy to work extra time, or extra hard, to get the job done. But, if the work is too much to be completed in the time available, then some of it remains incomplete. The employee can go home.

This is not what happens in your own business! Pretty much everyone who starts or buys their own business works longer hours, at least in the early days. We are sorry if that is...

June 19, 2017

As we have said before, we like to wait a few weeks before going to press with our thoughts about the annual Commonwealth Budget. This year has been no exception: we had scheduled our 2017 Budget special for this week.

The problem is, compared to previous years, the 2017 Budget was a bit of an anti-climax! In previous years, there have been a number of big-ticket changes – such as the big changes to superannuation that we have been discussing in recent articles. But this year there have simply been a whole lot of small changes, some of which will be of benefit and others will represent a small loss.

In this article, we examine those changes that are most likely to affect our clients. So, have a read of our thoughts and decide for yourself whether you’re a budget winner or a budget loser.


Disabled people

The government announced that the National Disability Insurance Scheme is now fully funded – the remaining funding has been raised by an increase in the Medicare levy (see bel...

April 10, 2017

A few years ago, a fellow adviser with good links to health providers was referred a client in his mid-thirties who had experienced a brain tumour and corrective surgery. The client had gone to see a psychologist, and in the course of his counselling, it was revealed that the client was in dire financial straits. He could not hold down a job (the treatment had left him with what was later diagnosed as an acquired brain injury, or ABI), and his new wife was pregnant with twins. His ABI meant that he found it difficult to organise help for himself, so his psychologist agreed to accompany him to a meeting with a financial adviser.

As it turned out, prior to the tumour this client had worked in various labouring roles. These roles necessitated super guarantee contributions into several funds. All of these funds had default level TPD insurance, and to cut a long story short, this client was entitled to a total of $125,000 in insurance payments.

Can you imagine the relief for him and his young...

February 20, 2017

If you already own a home, then the last 20 years have been wonderful. For you. But what about your kids? Around Australia, house prices have risen by more than 500% in the last 20 years. How will your kids be able to buy their home?

What’s more, the world of work is changing, and it’s not a good idea to assume your children will enjoy safe employment with just one or two employers during their working lives.

More probably, as the sociologists tell us, they will have a “patchwork” of part-time and casual engagements, with nothing like the secure tenure that typified their fathers’ and mothers’ employment experiences.

I am sure your kids are bright, and bright people tend to do well financially. But it is still not a safe bet that they will blitz their way in and out of university or trade school and then into the top echelons of the work-force. The competition is tough, and is going to get tougher.

What’s more, the competition is not just here in Australia. The global economy means our kid...

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