Hedged or Unhedged Funds?

If you have International Shares in your portfolio how does a rising Australian dollar impact on your investment value? When a managed fund that has overseas investments, such as a global shares fund, is unhedged, investors are exposed to fluctuations in the Australian dollar. This can be a good thing if our dollar falls relative to the currency in the country where the investments are held. 

For example, if you were invested in an unhedged US share fund and the value of the Australian dollar decreased relative to the US dollar, then the value of your portfolio would increase. This is because you would receive more for your investment if you converted it back into Australian dollars. Of course it can also work the other way around. As the Australian dollar increases in value, the value of an unhedged overseas portfolio would decrease when converted back into Australian dollars. This can result in unhedged global share funds delivering low returns even when the underlying markets have performed quite strongly.

When an overseas portfolio is hedged, the investment manager is using strategies to offset the impact of currency fluctuations. The objective is to ensure the only factor influencing the return from the portfolio is the income and capital gains (or losses) generated by the underlying investments – not currency movements as well. This means with a fully hedged portfolio, you are protected from the adverse impact of a rising Australian dollar. But equally, you don't get to benefit from situations where the Australian dollar is falling.

Which approach is best – hedged or unhedged?
Over time the Australian dollar will both rise and fall relative to overseas currencies. Holding some hedged and unhedged overseas investments can therefore reduce the risk you face from either way currency movements.
At Schuh Group Wealth Advisers, we help our clients to make informed financial planning decisions. Built on fundamental principles of honesty and transparency, our financial planners offer sound advice to people of all ages and walks of life. Our approach is simple, we take the time to discuss your goals and objectives with you and we then tailor the best solutions to assist you in reaching your goals. You can watch our Six Steps to Successful Investing video series for a full appreciation of our philosophy.



Our broad range of services can be summarised in three areas – strategic planning, investment management and risk advice. We then use our extensive network of insurance, accounting, legal, business and tax experts to tailor our recommendations to make sure you are getting the best advice possible.

Schuh Group Wealth Advisers provide advice with an emphasis on making sound long term decisions. We are committed to helping you maximise the return and minimise the risk on your investments. Our clients choose to live their ideal life and get on with what they do best. It may be running their own business, engaging in a professional career or enjoying retirement. Our clients can enjoy the peace of mind gained by delegating their financial affairs to an expert.

1. Strategic Planning
We will help you plan for the future, from wealth accumulation, debt management, superannuation, through to self-managed super, retirement and estate planning. Your adviser can show you methods to improve tax effectiveness and together you can create a Financial Road Map to get you to where you want to be.

2. Investment Management
If you are unclear about your investment needs, a Schuh Group Gympie Wealth Advice professional will work with you to design and implement a tailored personal investment portfolio. We can help you invest in shares and look at a range of fixed income investments and listed property trusts. Your adviser can also assist you to establish a disciplined savings plan and monitor, review and adapt your portfolio as required so that you are getting the most from your money.

3. Risk Advice
While we help you to grow your assets, we can also ensure that you, your family and your wealth are protected should a disaster strike. We can also offer a range of insurance solutions, as well as assisting you with your business purchase, sale agreements and succession planning.

We welcome you to contact us today and find out how we may be able to assist you in reaching your financial goals. Contact Dominique Schuh direct at dominique@schuhgroup.com.au. or the Schuh Group office on 54804877.

Recent insurance scandals with insurers showing a belligerent attitude to paying claims may have left some of us forgetting that insurers actually do pay claims. You wouldn't think so, given some of the media coverage, but Australian life insurers pay out a significant amount of claims each year. Here's the proof.

Australian life insurance claims paid by major insurers surpassed $9 billion in total for the first time in 2016. With that in mind, we've decided to take a look at the claims statistics from two insurers who each paid out over $1 billion in claims during 2016. The insurers are AIA and AMP Life. To highlight how these insurers are seen in the market place, in a recent Adviser Ratings research survey AIA were rated in the top three by advisers overall for claims handling. In contrast, AMP was rated mid pack for claims handling in each insurance category. However, the advisers who chose to offer additional commentary on AMP Life weren't overly positive in their responses. Comments offered on AMP Life were 72% negative, in contrast, the comments on AIA were 76% positive.


Bear in mind the following claim stats come from company marketing documents and their statistics groupings are different, yet they do highlight an important point – the old "it won't happen to me" strategy isn't a wise one. The average person does fall victim to injury, disability, illness and premature death.

According to AIA, they paid out $3.16 million per day. Overall their biggest monetary claim area in 2016 was death at 45.5% (or as the industry calls it life cover), followed by total and permanent disability (TPD) at 26.4% of claims, income protection at 23.2% and trauma insurance at 4.8% of claims. The breakdown of life cover claims paid at AIA was 62.3% male and 37.7% female, 56.5% of claims paid were between the ages of 45-65, with 38% of life cover claims paid to be the result of cancer.

TPD claims paid at AIA were again majority male, 56.2% compared to 43.8% with 30.3% of them relating to musculoskeletal issues and 30.1% relating to cancer, respiratory, infectious diseases, 17.7% were mental health related and 12.4% were paid for consequences of injuries. AMP Life paid out $2.9 million in claims per day, with cancer resulting in 45% of life cover claims paid with heart attack & stroke resulting in 19% of life cover claims. The average age of a life claim paid was 53-year-old.

TPD claims paid at AMP Life had an average age of 49, with the largest claim area being musculoskeletal at 25%, with mental health following with 19% of claims paid. The other factor worthy of note is the age or age bracket where vulnerability appears highest. At AMP the average age for all claims was 52 years old, while at AIA the 45-55 age bracket saw the highest percentage of claims in each of the four insurance cover areas.

While this makes for sobering reading, it is a reminder that insurers (for the most part) actually do come through. If you'd like an obligation and cost free second opinion on your current insurance program, please give us a call on 07 5482 2855.

The share market has lost ground due to a broad sell-off of banks, insurers and other financial stocks, and the Australian dollar's surge above 80 US cents was tempered by slightly weaker than expected economic growth. The benchmark S&P/ASX200 index dropped 0.29 per cent to 5,689.7 points, as the financial sector's fall outweighed gains by mining and oil producers. Commonwealth Bank was again the weakest of the banks, down 1.2 per cent, Westpac shed 1.1 per cent, National Australia Bank dropped 0.7 per cent ANZ was 0.5 per cent weaker. Origin Energy gained 0.8 per cent, Oil Search added 1.7 per cent and Santos was 2.4 per cent higher. BHP overcame an early fall to add 0.4 per cent to $27.73, Rio Tinto gained 0.2 per cent to $68.25 and Fortescue Metals was 0.5 per cent stronger at $5.96.


The Australian dollar hit 80.28 US cents overnight but fell back below 80 US cents after the release of the June quarter gross domestic product figures, which showed slightly weaker than expected economic growth of 0.8 per cent in the quarter, and 1.8 per cent annual growth.

What this means for you:
Diversification across asset classes is key to any portfolio construction. It is also important within an asset class. If you take equities as an example, typical sectors include resources (iron and gold, etc), financials (banks), communications (telecommunications), energy (oil and gas), technology and others.

By splitting your share portfolio across sectors, you can help balance the normal ups and downs these sectors may experience over a period of time, as seen in this week's market movements. Also remember that you may have to go offshore in order to gain access to other sectors not represented in the Australian market. It's important to know how your portfolio is constructed and the depth of diversification within each asset class. If you would like us to review your portfolio then give us call.

Hope Reins Receives $500 Donation

Recently we sent an email to all our clients because we had some cash to donate. We asked you directly who you thought was a worthy recipient of one of our $500 giveaways and after a flurry of responses and some shortlisting, we decided on two amazing charities. One of the recipients was Hope Reins - a local initiative that rescues and re-homes horses and then facilitates programs for individuals in need to build confidence, overcome emotional and physical struggles and heal.

This week Dominique Schuh visited the Hope Reins farm to present the amazing team with a cheque and see how the programs work. Below is a brief description of what Hope Reins offers, in their words.

"What We Do" 

"At Hope Reins, we rescue horses in need and offer them a safe and loving home.  But what we do goes much further than that … We also use our horses to work with people from all backgrounds and walks of life.  We facilitate that quiet, beautiful connection between horse and human, to help make our people (and our horses) feel whole again, as well as loved, connected, worthwhile and accepted.

People come to Hope Reins for all sorts of reasons. They may lack confidence or have a fear of horses; some are suffering stress or anxiety; others are battling with depression and/or thoughts of suicide; some are overcoming trauma, and some are dealing with self-harm.  Whatever the reason, they find the time and space to heal.

Most of our horses have stories of rescue or recovery. Whilst the size of our property means we can't responsibly accept all horses, we do try and help or refer people who have a horse for rehoming." 

Schuh Group is proud to be able to support the Hope Reins initiative. For more information on the farm and their programs visit www.hopereins.org.au


The share market has reversed earlier gains to close lower after falls by financials and healthcare companies outweighed gains in the energy and telco sectors. The benchmark S&P/ASX200 was down 0.2 per cent at 5,737.2 points at the close of trade, after being 0.2 per cent higher in early trade.


The big four banks were relatively steady, though Commonwealth Bank shed 0.6 per cent, and faces a potential shareholder class action related to the allegations it breached anti-money laundering laws. The health care sector was also impacted by disappointing financial results. The energy sector was stronger, with Woodside Petroleum, Santos, Oil Search and Origin gaining between 0.85 per cent and 1.9 per cent after global oil prices rose on expectations of further falls in US supplies.

The Australian dollar dropped below 78.92 US cents as the US dollar rose on improved sentiment around the Trump administration's economic agenda. The spot price of gold in Sydney at 1700 AEST was $US1,286.15 per fine ounce, up from $US1,285.00 per fine ounce on Tuesday.

What this means for you:

With continuing instability in the markets, it is a good time to remember the importance of having not only a diversified portfolio but maintaining that diversification across the asset classes within your portfolio. As you can see from this week's market update different sectors are affected by different events nationally and globally, so whilst we may see a fall in the price of the banks or the health sector, this may be balanced out by rises in other sectors such as energy. Stay disciplined with your investing.

How NOT to Invest

The ABC's 7:30 Report recently featured a story on victims of poor financial advice (investors duped by a noted investment spruiker) who are calling for reforms to protect anyone else from suffering what they've endured over the past decade.

Despite these investors being found to be eligible for compensation by the Financial Ombudsman Service, most of them haven't seen a cent because those found to be at fault are either unwilling or unable to pay. Those affected are calling for a fund set up to ensure losses are compensated. However, one of the sticking points is whether it should be retrospective to cover past losses or prospective to protect investors in the future.

Without debating the merits of any such fund, we will say in an ideal world we wouldn't need any compensation fund because potential investors could spot terrible investments and those pushing them from a mile away. 7:30 has reported previously on the same spruiker who deemed himself a wealth educator. He was hosting 'wealth seminars' that cost $4000 to attend where he dispensed his secret formula to getting rich. The key points noted by investors in both reports were:

1. They were told it was safe and they couldn't lose money.
2. They were encouraged to borrow against their home.
3. They were encouraged to put in as much money as possible.

We'll stop here for a few pointers. The first point should have been the immediate deal breaker, rarely does an investment come without some risk and any legitimate adviser would always look to spell out what any risk is to a potential investor.

Secondly, if an investor is encouraged to borrow against their home or put in as much money as possible, they should first understand that investment well enough, to be able to then explain it confidently to someone else. The fact they proceeded after being told they couldn't lose money is a clear indicator they had no idea about the investment path they were heading down.

The spruiker was pushing high fee structured products (if you ever see those two words together – run!) that had redemptions suspended when the markets crashed during the GFC. As they'd geared into them they were left paying fees and interest with no access to their capital.
Some other key points noted:
1. The spruiker was offering to turn the investors into millionaires.
2. After the seminar, the investors felt they'd be crazy not to invest.
3. They were encouraged to act quickly.
4. They were told the investments would have less volatility than the share market or real estate.

While we're not unsympathetic to the investors and their plight, they do need to accept they paid $4000 to listen to a spruiker tell them they could become millionaires without taking any risk. The only way to become a millionaire with taking as little risk as possible is through buying a lottery ticket and striking it lucky. The downside risk there is $10. Realistic investing is a long-term process. Investments should align with financial objectives, it requires understanding risks (and personal risk tolerance), it requires consistent contributions while maintaining discipline through times of volatility.

Finally, we're not naming the spruiker because he's an interchangeable piece. They all use the same language about safety, guarantees, and no loss investments while promising life changing returns. Every investor, regardless of experience, needs to recognise such language for what it is and walk away. If you want to find out your options for long-term success (all risk disclosed), contact us today.

TWENTY dollars won't get you too far these days. At best, a few cups of takeaway coffee, lunch (maybe),  or a single cocktail at a bar on the weekend. However, $20 goes a long way, for a long time, in your superannuation.


Projections by super industry group ASFA, show that salary sacrificing $20 a week into super can deliver a 20-year-old an extra $435,000 in retirement, or $87,000 in today's dollars. A 30-year-old can build an extra $198,000 ($55,000 in today's dollars), for a 40 year old it's $82,500 ($33,000) and a 50 year old gets $29,700 ($16,500). This is the power of compound interest over many years. There are also tax benefits of salary sacrificing into super!

If you would like us to show you what salary sacrificing $20 a week into your super looks like and forgoing those 4 or 5 takeaway coffees, then give Dominique a call on 07 5482 2885.

Schuh Group are proud supporters of the second Gympie Jazz and Wine festival being held this Saturday, August 5th to support Wishlist. The 2017 festival will raise vital funds for a neuro-perfusion package for the recently installed CT Scanner at Gympie Hospital. This upgrade will allow acute stroke patients to access new treatments and alleviate the need for travel to the Sunshine Coast University Hospital. The advanced imaging will also link Gympie Hospital directly with the Royal Brisbane and Women's Hospital to enhance patient outcomes.

Featuring celebrated jazz and blues artists, gourmet food, a selection of award-winning wines and a VIP area, the Wishlist Jazz and Wine Festival raises vital funds for the needs of Gympie Hospital.

WHEN: Saturday 5 August from 2 pm until 6 pm

WHERE: Gunabul Homestead, 9 Power Rd, Gympie

COST: General admission $50

HAMPERS: Wine & cheese hamper-for-two

BYO: Rug, sunscreen & chairs

* Please note, no food or alcoholic beverages are permitted through the gates at the 2017 Wishlist Jazz & Wine Festival.

We hope to see you there. It is a brilliant opportunity to support an incredible cause, and have fun as well!

Most investors will understand that lack of diversification across their portfolio increases risk and introduces volatility. For many property investors in Australia however, the ongoing stability and continued growth of the property market feels very comfortable – in bricks and mortar, "I can see my asset", kind of way. One option that may make sense and reduce volatility for such investors is diversification into the commercial property market. Security of income from commercial property is generally higher than thanks to the binding nature and longer term leases comparative to residential and commercial tenant's financial covenants are often superior.

Commercial tenants are also often responsible for the majority of outgoing expenses whereas residential tenants are not, providing investors in commercial property with a higher percentage of rent received. However, as with residential investing, there are still risks and traps associated and investors need to ensure they fully understand what they are investing in if they are to succeed. Commercial property covers a range of options, from offices and retail spaces through to car parks and industrial properties such as warehouses and factories. There are a multitude of options, which if accessed at the right time and right price can produce large returns, however things in commercial work a little differently to residential.

The small yet impacting subtle differences explained:
Long-Term Leases
For many investors, the long lease arrangements are a great benefit of investing in commercial property, as it gives them greater certainty of rental income for a longer period of time. However, you must remember that the leases on commercial properties are more susceptible to economic volatility and therefore at times it can be harder to secure a lessee on a commercial property that is designed for a specific purpose. As such, opting for a property with multi-use appeal may help you attract a broader range of tenants and secure the right people for the long-term.

The GST Factor
GST applies to commercial property purchases so you must be aware that when buying you will have to add 10% to the purchase price.

Maintenance
Unlike in residential property, the costs of maintenance, rates, and repairs on a commercial property are paid by the lessee. This means more of the rent you receive goes towards your profit. To ensure clarity of responsibility make sure you have this clearly stated in the lease agreement.

The Finance
As far as mortgage options go, there are a wide variety of commercial property loans available and most work in much the same way as a residential home loan. As an investor, you can choose between a variety of rate options and loan functions just as with your residential property lending.

With South-East Queensland continuing to grow and expand at a rapid rate across a number of industries and continuing low-interest rates, maybe right now, is a great time to explore what a commercial property would look like in your portfolio…If you would like to find out your Commercial Lending power, contact the team today!
Contact us direct:
Dannii Heron: dannii.herron@schuhgroup.com.au
Jo Bennett: jo.bennett@schuhgroup.com.au
David Schuh: david.schuh@schuhgroup.com.au

Winners of $1000 Charity Giveaway Announced

The Australian sharemarket followed global stocks higher but the Australian dollar fell after consumer inflation came in well below forecasts. Wall Street stocks rose 0.3 per cent, but the S&P/ASX 200 index climbed 50 points, or 0.87 per cent, to 5776.6 as rebounding commodity prices and the neutral interest rate outlook boosted sentiment. Consumer price inflation slowed to 0.2 per cent over the June-quarter, half expectations, and at 1.9 per cent on an annual basis, CPI was below the bottom of the Reserve Bank's target range of between 2 per cent and 3 per cent. The dollar fell US0.6¢ to US78.90¢, having hit a high of US79.70¢ last night as rate rise risks abated.

And the winners are ...

Last week, we asked our clients to nominate their favourite local charities to receive $1,000 towards their charitable work. There were many incredible nominations, but he had to narrow it down to the following two organisations. These organisations work tirelessly to improve the lives of the people they work with.

Hope Reins
The farm is owned and operated by Ms. Kylie Read and Ms. Ruth Polley and is run totally on donations and with the help of a large team of volunteers. This group works with mainly rescued and abused horses, and with children and adults who are having difficulties with life. Their motto is "Healing Horses Helping Hurting Humans". The program usually runs for two hours once a week for eight weeks. The farm also runs Corporate days, where staff can experience the program and be challenged to do the trust ride.


(*Image courtesy of The Gympie Times)

Angel Gowns
Angel Gowns Australia Inc. is an Australian organisation. The volunteers at Angel Gowns Australia deconstruct donated wedding gowns and turn them into numerous 'Angel Gowns' for stillborn babies. Sadly, the demand for these gowns is enormous. Grieving families are given a beautiful gown, made with love, to dress their baby in. It is wrapped in a beautiful white box along with an Angel pin and poem card as a keepsake. There is no cost to the grieving family for this service, it is a cost to the organisation.


We have been humbled to see the work done with such dedication by these tireless volunteers, and the comfort and support it brings to recipients. Congratulations to both of these organisations, and thank you for everything you do in our community.

How Hard is Your Super Working For You?

The sharemarket shot back above 5700 points on Wednesday, lifted by a rally in bank shares, which enjoyed their best day in eight months after the relief that new capital requirements weren't as tough as many had feared. ANZ soared 3.9 per cent, Westpac gained 3.8 per cent, NAB rose 3.1 per cent and Commonwealth Bank closed 3 per cent higher, for a cumulative gain of about $14 billion in value.
The S&P/ASX200 climbed 0.8 per cent to 5732.1, with gains in the big four banks alone adding more than 50 points to the benchmark index. The chunky gains in the banks disguised the fact that overall there were slightly more losers than winners on the ASX200 as numerous blue chips ended in the red.



What this means for you:

I read an interesting article this week titled "Why picking a superannuation fund isn't like shopping for groceries". Basically, it was about consumer choice, the more choices the better - right?

Well it seems in the case of superannuation funds the answer may be no. In comparison to shopping for something like a smart phone, superannuation is a complex product for consumers and too many options can just add even more confusion. With more superannuation products coming into the market and consumers generally not understanding the different fee structures in different superannuation funds or their different investment options, the choice and complexities may become overwhelming. It has been found that about two-thirds of all super fund members have their money in default accounts…. Which is the most important fact I took from this article, as this means that two-thirds of the population are leaving their future stability set to default!

Whilst it seems that many people have become complacent about how their super is invested and the fees that are being charged by super funds, having your super invested in the correct manner for where you are in your life and in-line with your tolerance for risk will stand in you good stead for the day you are able to access your super - retirement. Having this understanding can also mean the difference in retiring comfortably or having to be careful with each dollar you spend in your golden years. Whilst we don't have a crystal ball to predict what markets may or may not do, we can help guide you to make sure that your superannuation is invested wisely and that the fees being charged aren't unnecessarily eating into your retirement income.

If you would like to talk about your superannuation and how it is invested, give us a call. In an optimum situation, your super is working just as hard as you are!

As we settled into the New Financial Year we have taken some time to review our business goals, our vision, mission and values and where we are focusing on going in the next 12 months. For the team at Schuh Group, the community is very important - it is one of our top values and we want to support you to help make a bigger impact in our community so that we all prosper together. We value the idea of community and view it as an extension of the family. As a family-owned and operated firm with deep rural roots, we understand the importance of relationships and working together. So we are committed to investing our resources into the local community to support the growth and development of both the economy and the people. 


With this in mind, we have decided to share $1000 in cash with some YOUR top local causes! This week we are looking for 2 worthy causes that would benefit from a cash donation. We know that there are an abundance of opportunities to help, so we need your help to find the most worthy cause right now - it is our way of supporting you in your community!

To nominate a cause all you have to do is:

1. Send an email to matthew.moon@schuhgroup.com.au
2. Type the word NOMINATION in the subject line
3. Tell us the name of the cause/charity and WHY you want to nominate them

On Thursday we will send out our top charity nominations and you can vote on the top 2 to receive $500 each! A worthy cause can be anything that is important to you that serves to benefit our local community in some way - it may be a charity or a giving program at a local business. We are open to all nominations and look forward to hearing from you!

Online Scams a Trap For The Unwary

Rising iron ore prices couldn't protect the Australian share market from the fallout from the latest political drama in the US, with all sectors shedding value as investor sentiment was hit by concerns about the future of the Trump administration's economic agenda. The benchmark S&P/ASX200 index fell one per cent to 5,673.8 points, as a handful of resources stocks providing the only bright spot. Global markets have been jittery following the release of emails connecting Donald Trump Jr, the US President's eldest son, to Russian support for his father's 2016 election campaign, again raising concerns over the durability of the US administration. But the Australian dollar is stronger against a US dollar weakened by the Trump Jr emails, trading at 76.51 US cents at 1630 AEST, from 76.18 US cents on Tuesday. 


What this means for you:

We would like to send a timely reminder to all of our clients to be vigilant against online scams in the wake of QLD police having charged a 75-year-old man with receiving more than a million dollars from ransomware victims as the representative of overseas scammers. Victims were contacted by cold-calling overseas criminals and told their computer needed repairs, Mackay police allege. If the victims agreed to provide remote access into the machine, the scammers would download and install ransomware on their computers and demand money to unlock the files. 

While such scams are an issue all year round we are now heading into a time of year where we see an increased number of scams from scammers purporting they are from the Australian Taxation Office. You should be wary of emails, faxes, SMS and phone calls claiming to be from the ATO. These could be scams designed to trick you into paying money or providing personal information. Once they have your information, scammers may use it to: 

1. Access your bank accounts
2. Take out loans in your name
3. Lodge false tax returns or BAS statements
4. Claim Centrelink or other benefits.
If you think you are a victim of a tax-related scam, phone the ATO on 1800 008 540 (8.00am–6.00pm, Monday–Friday). You should do this as soon as possible. If you receive a suspicious email claiming to be from the ATO, do not click on any links, open attachments or respond to the sender. Forward the entire email to ReportEmailFraud@ato.gov.au without changing or adding any additional information and delete from your inbox and sent folder.

Relief over the Reserve Bank's neutral policy stance faded and the Australian share market closed in the red as attention turned back to the weak domestic growth outlook. There was no lead from the US last night because of the Independence Day holiday, but the S&P/ASX 200 index dropped to a 0.5 per cent loss and closed down 20.5 points, or 0.35 per cent, at 5763.3 with most sectors closing lower. The Australian dollar was slightly firmer at US76.20¢ following its one per cent loss yesterday after the Reserve said a strong dollar would complicate the domestic growth recovery.



What this means for you:
The 1st of July is like a whole new year for us, which makes it a great time to get your superannuation, investments, savings and insurances in order for the year ahead. This is everyone's opportunity to set new goals and create new money habits for the next 12 months.
This may include reviewing your insurance premiums – do you have enough cover or maybe too much, can they be structured or funded differently? Could you contribute more into super this year? If you can, what will this look like in 5 or 10 years time or when you retire? If you have other investments, is there enough diversification within your portfolio? Are you paying too many fees?

It's also a good time to tidy up the last financial year by getting all your records together and booking in to have your 2017 tax done. If you can get off to a great start, there's no reason why this can't be your best financial year yet!

As the dust settles on another Financial Year and you begin to plan and set goals for the next 12 months of money-related business, why not take a step in the right direction with an obligation-free home loan health check?


With home loan interest rates continuing to remain low (for now), it is the best time to take a step forward and look at all your options no matter if you are getting in the market, wanting to review your current lending structures, or maybe it is time to look at how you can offset your reduced capacity for super contributions with an investment property. So why not call us for a chat? We offer a complementary, home loan health check - that is designed to ensure that you are in the right structure for you and your needs and have the best loan option to suit you - and there's no time like the present!
 The aim of our home loan health check is to answer these questions:

1. Are you paying too much interest on your current mortgage?
2. Does your loan still meet your current needs?
3. Have your financial or personal circumstances changed? And if so, do you need different features and benefits from your loan?
4. When we update this information, we can look at your financial plans for the next 12 months and advise on how your loan could be set up to help you achieve your goals. For example, we could potentially help you unlock your equity to invest, renovate or make some lifestyle improvements.

Interest rates are staying low for now, and this alone is a great reason to ask us to give your home loan a full review right now. We have access to a wide variety of lenders, so we're in a great position to help you compare loan products and choose one that suits your current financial circumstances. A saving of just a little on your home loan now, could add up to a significant difference over the life of your loan. So why not give us a call today?

To register for your free "Home Loan Health Check" please call David Schuh directly on 0400 224 615.
The Australian sharemarket remained in reversal mode, this time to the upside as a mid-session spike in iron ore futures boosted miners. The S&P/ASX 200 index dropped 0.6 per cent in morning trade, but it bounced to close down 6 points, or 0.1 per cent, at 5714.2 as Singapore iron ore futures jumped 3 per cent. The Gold price plunged during the week to a 6 week low, presumably due to a "fat finger" erroneous trade, but prices have now re-stabilised. The Australian dollar also rallied along with miners, rising US0.3¢ to US76¢.

What this means for you:

The new concessional contribution cap of $25,000 kicks in July 1. If your current concessional contributions into superannuation are in line with the existing $35,000 and $30,000 caps (depending on your age) you need to make sure that you revisit your existing contributions come July 1 when the cap reduces to $25,000 for everyone. This means that any existing salary sacrificing arrangements will need to be re-visited. If you need assistance with looking at your salary sacrifice amounts for the new financial year and learning about the new carry-forward rules for concessional contributions that have been legislated give us a call to make an appointment. The Gold price movements during the week add further weight to the argument that investors shouldn't get caught up with daily price movements. Never fall into the trap of making a short-term decision on a long-term asset.

How is Your Retirement Planning Coming Along?

The Australian sharemarket fell to a four-month closing low as banks fell again and resource stocks were dragged down by sharp falls in oil prices. Wall Street reversed 0.7 per cent Tuesday night, but the S&P/ASX 200 index tumbled to close down 91.6 points, or 1.59 per cent, at 5665.7 as bullish global sentiment wilted along with commodity markets. The Australian dollar fell US0.4¢ to US75.60¢ as the US dollar rallied against major currencies on the US Federal Reserve's "hawkish" interest rate outlook. 

What this means for you: 

Are you on track for retirement? It's never too early or too late to start planning! With an ageing population and ever changing rules around superannuation and retirement, it's more important than ever to start planning ahead for your retirement. We are living longer than previous generations so we need to make sure now, that we are going to have adequate funds and assets in retirement to meet not only our lifestyle goals but to make sure that our retirement funds are going to last the distance. In a perfect world people should start looking at their retirement in their 20's or 30's (you can't beat 30 to 40 years of compound interest working on your savings) but in saying that don't panic if you think you may have left it a little too late. People of any age can start boosting their retirement savings and get on track to have the lifestyle they want once they retire. 

If you haven't started planning for your retirement, or need your retirement planning reviewed our services include: 

1. Calculating how much you'll need in retirement to enjoy the lifestyle you want
2. Preparing and implementing retirement planning strategies
3. Superannuation planning and SMSF's
4. Budgeting and cash flow management
5. Transition to retirement strategies
6. Centrelink eligibility ad calculating your potential entitlements
7. Help with estate planning 

We are all going to retire at some point so make sure you are in the best possible position when that day comes by making an appointment with Dominique to review you retirement strategy. If you would like to review your current structures, contact us today on 5482 2855.

Super Changes Push More to Family Trusts

With the legislated changes to superannuation just weeks away, trusts are becoming more popular as an "alternative" investment vehicle for those who have more to invest than the new super rules will allow. It is important to note that superannuation is still the most tax effective way to invest and that we see a trust as Plan B depending on your circumstances. Financial advisers have noted a marked increase in clients wanting to set one up, either dismayed by how little they'll be able to get into super after July 1 or fed up with government changes to retirement savings. 



But who do they suit and what are the potential benefits? Just like a super fund, a trust is an investment structure into which you put money that's invested for you. A trust is tax-neutral in that it pays no tax on earnings and taxable income flows through to beneficiaries - a spouse, children and wider family members - and they pay tax on what they've been paid (their distribution). By comparison, super funds pay tax on earnings, albeit at a low rate (a maximum of 15 percent). 

This sort of income splitting has long been a key attraction of family trusts. What's pushing them higher on investors' agendas is that after July 1 it's going to be harder to get large amounts into super. 10 years ago someone over 50 could get contribute $105,000 in a year to super. Under the new rules, there will be a flat $25,000 for all ages making pre-tax ("concessional") contributions. Ten years ago you could make an after-tax ("non-concessional") contribution of $1 million but after July 1 it will be $100,000 a year (as long as your super balance is under $1.6 million at the end of the previous financial year). Flexibility is another reason more clients are considering trusts. There are no investment rules, no contribution rules and no preservation requirements (rules on when you can withdraw funds), and unlike super, the trust can buy personal use assets like a holiday house. Family trusts can also be beneficial in the following circumstances -
1. Income splitting
2. Estate planning
3. Business merger
4. Capital gains
5. Asset protection
6. Second marriages
If you would like to discover if a family or discretionary trust can be part of an investment, tax or estate planning strategy please give us a call on 5482 2855.

 


Some Financial Housekeeping For June 30

The ASX dodged the US mini-tech-wreck on Tuesday, surging to its best daily performance in seven months, as investors flooded back into beaten-up bank stocks. The benchmark S&P/ASX 200 shrugged off a downbeat Wall Street lead to gain steadily throughout the day. It closed up 95 points, or 1.7 per cent, to 5772.8, while the broader All Ordinaries index added 1.5 per cent to 5801.4. The Australian dollar was flat at US75.50¢ and government 10-year yields marginally firmer at 2.403 per cent as global investors awaited the US Federal Reserve interest rate decision . Overnight the US Federal Reserve has raised its key interest rate for the the third time in six months, providing its latest vote of confidence in a slow-growing but durable economy. 

What this means for you: 

This week we wanted to bring you some of the take outs from the Queensland budget that was released on Tuesday. There is a budget surplus of $2.8 billion in 2016/17, falling to $146 million in 2017/18. The state government sees unemployment to remain steady at 6.25% for the next 12 months and there will be $10 billion spent on infrastructure programs across the state in 2017/18. It has been proposed that pensioners and seniors may be eligible for a $329 electricity rebate, $69 reticulated natural gas rebate, up to $120 off the cost of water access and usage charges and up to $720 once every two years for one-off emergency assistance to pay home energy bills. We will see a 3.5% rise in vehicle registration costs which is the third rise in three years almost doubling inflation. Drought assistance has been extended with up to $34.6 million in assistance in 2017/18 and the First Home Owners grant has been extended by 6 months to December this year.

Regardless of your financial position, the approach of June 30 brings some "housekeeping financial issues". This annual deadline is fast approaching, so please take some time to consider the following so that the end of financial year is as good for you as it can be: 

1. Review your Depreciation Schedule to delete any obsolete items and add any times not on the Schedule.
2. Check your insurance schedule to ensure you have equipment adequately insured and that you are not covering valueless equipment.
3. Visit your utility suppliers to negotiate fresh contracts e.g. electricity / insurance providers.
4. Visit your banking arrangements to ensure you are getting the best loan or interest rate deal. Remember, with banks "if you do not ask, you will not receive".
5. Ensure employees are being paid correctly and that superannuation and wage records are up-to-date so employee pay records can be finalised promptly after June 30.
6. How long has it been since you reviewed your Will – does it adequately reflect your intentions when considering your current assets or debt levels and family situation?
7. Visit your bookkeeping processes – are they accurate, timely and cost or time efficient.
8. Review you first nine months trading to consider profitability. Are you comfortable with your profit level or return on investment?
9. Consider superannuation or savings plans. Statistics tell us we will live longer so we need to provide better and more stable retirement income streams. 

At Schuh Group we have a team of experienced, committed people to help guide and plan your financial future. We are a second generation business with firsthand experience in wealth creation. So, if you feel you need assistance in any of these areas, please don't hesitate to contact us on 07 5482 2855.

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