The ATO receives around 20,000 reports each year from people who believe their employer has either not paid or underpaid compulsory superannuation guarantee (SG). In 2015-16 the ATO investigated 21,000 cases raising $670 million in SG and penalties. The ATO's own risk assessments suggest that between 11% and 20% of employers could be non-compliant with their SG obligations and that non-compliance is "endemic, especially in small businesses and industries where a large number of cash transactions and contracting arrangements occur."


Celebrity chefs are the latest in a line of employers to publicly fall foul of the rules - one for allegedly inventing details on employee payslips and another for miscalculating wages. But what happens if your business gets SG compliance wrong? Under the superannuation guarantee legislation, every Australian employer has an obligation to pay 9.5% Superannuation Guarantee Levy for their employees unless the employee falls within a specific exemption. SG is calculated on Ordinary Times Earnings – which is salary and wages including things like commissions, shift loadings, and allowances, but not overtime payments. Employers that fail to make their superannuation guarantee payments on time need to pay the SG charge (SGC) and lodge a Superannuation Guarantee Statement. The SGC applies even if you pay the outstanding SG soon after the deadline.

The SGC is particularly painful for employers because it is comprised of:

1. The employee's superannuation guarantee shortfall amount – so, all of the superannuation guarantee owing
2. Interest of 10% per annum, and
3. An administration fee of $20 for each employee with a shortfall per quarter 

Unlike normal superannuation guarantee contributions, SGC amounts are not deductible, even if you pay the outstanding amount. That is, if you pay SG late, you can no longer deduct the SG amount even if you bring the payment up to date. And, the calculation for SGC is different to how you calculate SG. The SGC is calculated using the employee's salary or wages rather than their ordinary time earnings. An employee's salary and wages may be higher than their ordinary time earnings particularly if you have workers who are paid for overtime.

Under the quarterly superannuation guarantee, the interest component will be calculated on an employer's quarterly shortfall amount from the first day of the relevant quarter to the date when the superannuation guarantee charge would be payable. The penalties imposed on the employer for failing to meet SG obligations on time might seem harsh, but they have been designed that way on purpose. This is really money that belongs to the employee and should be sitting in their superannuation fund earning further income to support the employee in their retirement.

Where attempts have failed to recover superannuation guarantee from the employer, the directors of a company automatically become personally liable for a penalty equal to the unpaid amount.
Directors who receive penalty notices need to take action to deal with this – speaking with a legal adviser or accountant is a good starting point.

If you are uncertain about your SG obligations or would like a compliance audit of this and other key risk areas of your business, give us a call.

What You Need to Let the ATO About Your SMSF

The 1 July 2017 superannuation reforms introduced a new reporting regime for funds. Funds now need to advise the ATO of key events within the fund that impact on retirement income streams (pensions):

1. When you start a pension
2. When you stop a pension or take a lump sum
3. When the fund accepts a structured settlement contribution such as personal injury compensation.

Superannuation funds are also required to report the value of existing superannuation income streams at 30 June 2017. While reporting of these events to the ATO does not formally start until 1 July 2018 for SMSFs, event based reporting still needs to be completed if these events occur from 1 July 2017 – that is, you have a reprieve from the compliance but not the actual reporting.

If we are managing your SMSF's accounting and compliance, we will track most of these events for you electronically where you have enabled us to access feeds from your SMSF's bank accounts. If we see any transactions that could meet the reporting criteria, we will be in touch with you to confirm the nature of these events.Where electronic feeds are not available - if your bank does not support them or where you have opted not to enable the feeds, you will need to let us know about these events at the time they occur. In addition to the new events based reporting regime, SMSFs are also obliged to report any of the following changes to the ATO within 28 days.

1. Fund name
2. Fund address
3. Contact person for the fund
4. Fund membership
5. Fund trustees
6. Directors of the fund's corporate trustee
There is little room for error when it comes to SMSFs, so as always, if you have any questions or concerns, contact us on 5482 2855 and get the correct advice and information for your particular situation.

One of the most gratifying things about doing business in country communities is that we are afforded opportunities to make contributions of all kinds, and (hopefully), leave a positive footprint. Recently, we were thrilled to receive this letter of thanks from the Kingaroy State High School recipient of our Bursary for Volunteering. We view volunteering as a wonderful way to develop compassion and empathy in young people, as well as generally make the community a stronger, kinder, and better place to be. The recipient of the bursary, Breanna Taylor, is already well on the way to developing the attributes that are the foundation of tight knit and caring communities. Congratulations Breanna. It will be wonderful to watch you continue on your educational journey.

When Buying Stocks, Do You Think Small?

Gains in all but one sector of the share market have lifted the All Ordinaries index above 6,000 points for the first time since the global financial crisis. The All Ordinaries index rose 0.5 per cent to 6,005.5 points, its highest level since May 2008, and the benchmark S&P/ASX200 index gained 0.5 per cent to 5,937.8 points. Energy producers set the pace for the market's gains, as oil prices hit 24 month highs. The big four banks also rose, with their gains ranging from National Australia Bank's 0.7 per cent to Commonwealth Bank's 0.05 per cent. The Australian dollar on Wednesday was slightly weaker against the US dollar at 76.62 US cents, from 76.80 US cents on Tuesday after the release of weaker-than-expected Chinese manufacturing data. The spot price of gold in Sydney at 1700 AEDT Wednesday was $US1,272.27 per fine ounce, from $US1,276.24 per fine ounce on Tuesday.

What this means for you:

We see it quoted daily in newspapers, on radio and television, but for many people the All Ordinaries shares index remains a confusing set of numbers. To some people it's those weird finance numbers read out during TV and radio news bulletins. To others, they're an important part of how their investments are performing. Put simply, the All Ords (as it's affectionately known) is a measure of the value of the biggest 500 companies that are listed on the Australian Securities Exchange. When it was established in 1980 the All Ords was given a base value of 500 points reaching a high of 6873 points in 2007.

We would suggest you don't watch the daily movements of the All Ords index, but rather remember that the Australian market has always increased in value over the long term. Daily up and down price movements is a normal way for markets to behave, but it's what happens over 10 years or more that's most important. Every night on the TV finance news, you'll hear about the ups and downs of household name stocks, like the big four banks, Telstra, CSL, Wesfarmers, Woolworths, BHP Billiton and Rio Tinto. But the market is more than that handful of names. There are about 500 stocks in the All Ordinaries index, the indicator often referred to in the media as the benchmark for the Australian share market. The combined market value of all those stocks, as of August 2016, was close to $1.8 trillion. Large-cap stocks, such as the big stocks mentioned above, make up about 80-85% of the total market cap. Currently these are roughly the largest 100 stocks by size. The remaining 15-20% of the market cap is represented by the small company stocks.

So why would you want to include these often obscure companies in your portfolio? Well, there are a couple of reasons. One is that these stocks (known as 'small caps') tend to behave differently to the better known larger names otherwise known as large caps. Sometimes, large caps will be the best performers. Other times, small caps will be in favour. So owning both parts of the market means you are getting a diversification benefit. In other words, some of the volatility of being exposed to just one part of the market is reduced.

A second reason for owning small caps in a diversified portfolio is that they are expected to earn a premium over large company stocks. Research shows this small-cap premium (alongside premiums from low relative price and highly profitable stocks) is persistent across time and pervasive across different markets around the world.
There are a few provisos to this finding. One is that the premiums are not there every day, every month or even every year. While we expect them to be there every day, there are periods when small caps will underperform large caps. This makes sense because if the premium was there all the time, it would be traded away.

A second caution is that within small caps, other premiums are at play. Research shows that among small stocks, those with high relative prices (sometimes known as 'growth' stocks) and lower profitability tend to have significantly lower expected returns than the rest. That means we need to take into account of this difference in expected returns.

Finally, diversification is critical. Over shorter periods, some stocks may do exceptionally well; others exceptionally poorly. It's difficult to identify these stocks in advance. And that's why you need a well-diversified portfolio that can capture the performance of these stocks in a more consistent manner. Diversification also helps control implementation costs which if unmanaged can be quite high for small-cap stocks.

So what's been the long-term evidence of a small cap premium in Australia? Over nearly four decades to the end of 2015, small caps here delivered annualised returns of nearly 14%, beating large caps by around two percentage points per annum on average.

The tricky thing for investors is the "on average" bit. In some years, such as 1989, small caps significantly underperformed large caps. In other years, such as in 1993, small caps shot the lights out, figuratively speaking.
Indeed, over the four-decade period shown in the chart below, you can see that only in four years has the performance of small-cap stocks been within 2% of that average premium. So the small-cap premium (the difference between the performance of large and small cap stocks) can be volatile, which is the price you pay for earning the premium.

In recent years, Australian small company stocks have struggled. In fact, in the four years from 2011-2014 inclusive, the small-cap premium (as shown above) was negative. But does that give us any information about the future performance of small cap stocks or what might drive the performance in the years ahead? In other words, can we time the premiums available from small, low relative price and more profitable stocks? It would be nice, wouldn't it? But rigorous tests show very limited evidence that we could do so reliably. That's the bad news. The good news is you don't need to be a timing wizard to get the benefit of these premiums. We've seen they are there over the long term. And we know that the best way to capture them is to apply a consistent focus within a broadly diversified portfolio.

The nature of the small-cap premium, however, is that when it does kick in, it can do so with a vengeance. And that's precisely what we have seen in the past 12 months to the end of July 2016 as small caps (as measured by the same index as in the above chart) have delivered a return of about 18% in the Australian market, well north of the flat result from large-cap stocks. So the big glamour stocks are not all that there is to our market. Small cap stocks also play an important role in your portfolio. They provide a diversification benefit because they behave differently to those big names. But they also offer an expected premium over time. The trick is riding out the volatility and staying disciplined within the asset allocation your advisor has chosen for you.

It's a small world after all.

Our goal is to work with you to not only maximise your financial viability and opportunity now, as well as to ensure that we provide you with the guidance, advice, and support to plan for security later in life. Today more than ever, with ongoing inflation and rising living costs, it is important that people consider and plan for how they will live post-retirement. This is especially true for Gen X's and later.


In an article published on News.com.au in recent weeks, it was reported that only 19 per cent of us will retire comfortably, and Gen X Aussies will have to save up to $4 million dollars to enjoy their golden years, according to new research. These stats mean that the majority of Australians – over 80 % of us are at risk of "falling short" when it comes to the affordability of comfort in our later years. Furthermore, the article shared research statistics that forecast "anyone born after 1984, will likely need between $2.09 - $3.98 million dollars for a comfortable self-funded retirement in 26 years' time"

Obviously, the idea of comfortable is subjective and can change from person to person, however, according to SuperGuide, they suggest that a couple today can generally enjoy a comfortable retirement on about $60,000/year – which will require a significant lump sum investment, with the aged pension only covering a small percentage of living needs. For the coming generations such as millenials, the reality is much more stark with lump sum figures hitting the millions. The report continued to indicate that there were enormous - around$3.5 trillion dollars – in funds expected to be passed on from Australian Baby Boomers to their children over the next 20 years suggesting that about 75 per cent of all Gen X and Y with surviving parents will inherit an average of $110,000. If invested wisely, these funds could set up their future.

And that is the most important take-out from this discussion – that it is important to use what is available today to start investing for the future. It was also suggested that Australians, in general, have a limited understanding of smart, long-term investment options, which can cause feelings of being overwhelmed and lead to inaction. The key is to start learning now. Regardless of what stage of life you are at it is important to seek out the right advice from trusted sources. It is also important for parents and grandparents to actively work with their children to set up Estates and Investment portfolios that work for the whole family over the very long-term.

Education is key to success when it comes to financial investment and no matter how daunting things may seem, when you are proactive and sensible in your approach anything is possible. If you would like any information or advice regarding your personal estate and retirement planning please contact us today for an obligation-free consultation with our Wealth Advisory team.

When looking at getting a home loan, most people head straight to their bank and this could be a costly mistake! Right now in Australia, there are over 3500 different loan products available for purchasing a house. And on top of that, each different lender has different niches available that make them a better fit for one lender over another. When a person just goes straight to "their" bank to organise a home loan, they are potentially missing out on a product that has better features to fit their needs, cheaper rates and perhaps more flexibility.

Beyond the sheer number of options for lending products then you also have a lot of interest rates, terms, conditions, establishment fees and application criteria to sort through. Then there's fixed rate versus variable rate, interest only versus principal plus interest. This is where knowing and understanding the benefits a broker can provide will ensure that you not only get the best product for you, you will save time and effort in finding and securing the best product too. Below are a few of the top (and most sensible) reasons to use a broker:

1. Choice

Using a mortgage broker offers you the freedom of choice. It is like sitting in front of 15+ banks with hundreds of loan products and all of them offering varying benefits and opportunities. This could also be the difference in finding lower rates, loans with lower fees, or specific loan features to help you pay off your loan faster and in turn, means paying less in the long run!

2. Insider Knowledge

Mortgage Brokers deal with multiple lenders every day and this means that they know what needs to be done to get your application approved by each lender and how to get it done smoothly with no delay. Brokers are keeping up to date with any changes – legislative and lender-orientated and act as your personal advocates with the lenders – so you can trust them to do everything that needs to be done to get you the loan you chose.

3. Time

Brokers do the work for you. Following up the progress of your loan application is time-consuming and can be frustrating. When you use a broker they do all the paperwork and follow up the lender so you don't have to. They will then guide you through each stage of the process and ensure that the lender and you have everything needed at every stage. Ultimately when you use a Mortgage Broker you will save time and money with a faster approval and better chance of getting the right product for your needs. And best of all – Mortgage Brokers have no upfront fees or cost to the client.

If you are searching for a new home, an investment or maybe a second opinion on your current loan, call Schuh Group Finance today and let us get you approved! To register for your free "Home Loan Health Check" please email one of the Schuh Finance team below or call David Schuh directly on 0400 224 615. Email the team today, have a new rate option tomorrow:

David Schuh:     david.schuh@schuhgroup.com.au
Jo Bennet:       jo.bennett@schuhgroup.com.au
Dannii Herron:     dannii.herron@schuhgroup.com.au

The 'How' of Investing is Often Overlooked

The share market's recent run of gains has stalled due to weakness among telcos and miners and heavy falls from Crown Resorts and Lendlease. The benchmark S&P/ASX200 added just 0.02 per cent to 5,890.5 points, after being up to 0.3 per cent higher in the early afternoon.
Rio Tinto dropped 0.8 per cent to $70.92 and BHP Billiton shed 0.5 per cent to $27.17 after posting a three per cent drop in iron ore production in the September quarter. Telstra dropped 1.7 per cent to $3.49. The Australian Dollar was trading at 78.45 US cents at 5pm yesterday, from 78.46 US cents on Tuesday


What this means for you:
Success as an investor starts with the key questions of why, what, where, when and how. Why are you investing? What are your priorities? Where is your destination? When do you hope to get there? But it's the 'how' that's often overlooked.
'How' relates to process. It's not just what you invest in, but the approach you take to investing. This means adopting set guidelines to deal with whatever financial markets, and life generally, might throw at you on the way to where you're going.

The Seven Virtues of Process
Following on from how success as an investor starts with the key questions of why, what, where, when and how in the 'What this means for you section', of this week's Market Update, we are going to look at "process" a little more deeply and what it means in terms of investing. The process is critical when investing for many reasons. Here are seven that we believe are important for any investor:

1. Process means setting pre-agreed rules with your adviser to keep you focused on your goals. Without rules, you may be more likely to act on emotion triggered by the headline of the day or whatever other distraction everyone is talking about.
2. The second advantage of having a process is that it can be tied to broad principles. For instance, agreeing that diversification improves the reliability of outcomes may leave you less prone to chasing the latest hot new share or sector.
3. Having a process keeps you focused on elements within your control – like dividing your wealth between shares, bonds, property, and cash, diversifying within those categories, rebalancing regularly, and watching costs and taxes.
4. Process is repeatable. The focus is on skill and execution, not on luck or providence. Of course, things will always happen that you didn't anticipate. But your reliance on chance is less with a set process than when you are just winging it.
5. A process acts as a yardstick. When news breaks, having a process can give you pause for thought. "This news is interesting and diverting, but is it sufficient to change how you are proceeding?" your adviser may ask. The answer is usually no.
6. A process can be personalised. Each person is unique, with different tastes and preferences and risk appetites. Perhaps you feel more comfortable with a larger cushion of cash that can be replenished at regular intervals. If this process keeps you on track and helps you better live with volatility then it most likely a good process.
7. Finally, a process does not have to be set in stone. Circumstances change. Needs evolve. A single process can never incorporate every eventuality. The key point is that the process can be reviewed and adjusted based on experience and what is happening in each individual's life, not to what is going on externally.

Of course, processes work best when they are integrated. Otherwise, a minor change elsewhere can throw you off track. Think of what happens in a restaurant if attention to the quality of ingredients, menu, and execution in the kitchen is not matched by attention to the quality of service in the dining room. Likewise, an investor who has agreed with her adviser on following strong processes around her individual plan will not be served well if those managing her money are not delivering on what they said they would do. In contrast, integrated processes that share and maintain a single vision tend to reinforce each other. Ultimately, process provides structure for your investment journey. The world will always be complex and uncertain, and there will always be a host of potential distractions. But just having a structure in itself can deliver you a level of reassurance.

With a process, you are less likely to pursue the uncontrollable or un-duplicatable – whether wasting time and money trying to second-guess markets or chasing last year's winners or switching your investment strategy based on whatever is fashionable at any one moment. Instead of trying to ride your luck or intuition, you are methodically and steadily following a repeatable and defensible process that your adviser has designed with your goals, circumstances, and preferences at heart. Ultimately, paying attention to process makes your destination more achievable.

How to Get a Business Loan Quickly

When your business is in its first few years of operation, it can seem hard to get a bank to support your vision. If you're wondering how to get a business loan quickly in Australia, there is a formula you can follow to improve your chance of success and make things faster and easier.

Here's what you need:
Financial Documents + Business Plan = Lending Outcome
First, make sure you've got all your documents in order – as boring as it is, it's actually the most important part. There are two parts to your documentation: your personal information that gives lenders a feel for your personal reliability; and your business information, including projections for the future.

Personal Information:
If you're a director of an Australian company, you'll need the following personal information in order to apply for a business loan in Australia:

? your last 3 years' tax returns (including ATO Portals)
? personal bank account details and statements for the last year
? credit card statements for the last year
? information about any current personal loans
? current assets and liabilities
? where you've worked the last 3 years
? where you've lived the last 3 years

If you have these documents, you'll be well prepared for any applications you want to make. You'll actually also need this information if you're trying to arrange a home loan so it's a good idea to keep the documents up to date. Now, on to the information about your business, you'll need to apply for a business loan.

Business Information:
Maybe you need to purchase inventory, buy equipment or invest in some property. Whatever it is, the formula doesn't change very much, and once you've been through a business loan application process once you'll have most of the information to do it again.

? Certificate of Incorporation
? Banking Statements (for up to 3 years)
? Current Lease Agreement (if any)
? Audited financials (or interim financials if audited accounts aren't available)
? Business Tax Return (if you've been operating for more than a year)

If you have an agreement with the ATO regarding a tax debt, that's fine! We just need to get a letter from your accountant explaining the nature and terms of your agreement with the Australian Tax Office. Understandably, this may impact on the quality of the terms lenders respond with, however, it is still worth evaluating the opportunity to know where you stand.

A recent Business Plan:
Your numbers tell where you've been and who you are. Your business plan shows where you're going. If you haven't completed one, try following the process in our article on preparing a business plan. At a minimum, the Business Plan should explain why you're wanting to do what you're proposing (in the general business, and should highlight where external funding like bank lending fits in), why it's likely to succeed, what success actually looks like and in what timeframe. The important thing is to keep it simple, clear and easily tied to numbers. Banks and lenders will skip over or plain ignore anything that looks like "waffle" or an overly passionate view of the world. They're looking for a rational, clear-headed business owner who knows their numbers, their operation, their industry and the levers that affect everything. When we work with business loan clients, we help them refine their business plan to show the business's plans in a clear, finance-friendly way that makes it easy for banks and other lenders to make a decision on their ability to lend to you.

Lending Outcome:
Now to the most important part: the outcome! If you've been diligent in accurately completing all your information, you're at least on the path to a lending outcome with minimal back and forth for additional information. Hopefully, your chosen bank is satisfied and offers you a workable loan. It's not uncommon to get a few rejections in the early stages of your business. Having a business-savvy commercial finance broker by your side through this stage can reduce stress and confusion, as well as delays that you can face trying to deal with each bank individually. If you'd like to talk about how to get a business loan quickly for your company, we'd welcome the chance to meet with you and see if we can help you realise your business goals. Why not contact our business lending consultants today and let us help you secure the outcome you want.

As another year rolls into the last months and we embark on a new year to come, it can be a time of reflection for many people. Taking stock of the year and your life may include everything and anything from business and career to family and health. And one of the best ways to reflect on what is important and organise yourself is to review, update or create your Will.


Wills aren't just for people who own property or have lots of money. Making a Will is a positive step you can take to:

1. Provide for the people you care about
2. Leave particular items to certain people
3. Appoint a person you trust to carry out the instructions in your will (your executor)
4. Leave any other instructions you may have (for example, about your funeral arrangements)
5. Make a gift to charity, if you wish. 

Making a Will removes the doubts and difficulties that can arise when there is no evidence of the deceased person's wishes. After your death, your property and belongings are referred to as your estate. If you'd like your estate assets to be directed to specific people or charities after you're gone, then a Will is undoubtedly the best way to ensure that this happens. These are a few of our most frequently asked questions to support you when compiling your Will:

When considering your Will/estate, what are the top 5 most important things to focus on?
1. What people would you like to provide for from your estate? Who are your beneficiaries?
2. Who would you like to administer (be responsible for) your estate on your behalf? i.e. your Executor
3. If you have children under the age of 18, whom would you like to nominate as their guardians?
4. Are you likely to have tax payable on your estate and have you ensured that this is minimised?
5. Is there a chance that you've left someone out of your Will who may be entitled to something? Do you feel this person may contest your Will?

What is the process to make a Will legal? 
You must be over age 18, of sound mind and you need to nominate in writing where you'd like your assets to go after you pass away.

Are the Self-Will kits at the post office ok to use?
We always recommend getting a Will done through a Solicitor in order to make sure nothing is missed.

I don't have a lot of assets is it really important for me to have a Will?
If you want to make sure the assets you do have (even sentimental items such as jewellery or antiques) are directed where you'd like them to end up after you pass away, it's still important for you to outline your wishes in a Will document. Even if you don't have a large estate, the best way to be directive about what you do have is through a Will.

If I don't have a Will, what happens?
If you don't have a Will and you pass away, you're deemed to have died "intestate". When this happens, the Public Trustee will step in and decide where your assets will be directed, regardless of what your true wishes may have been. The Public Trustee will take into account your family relationships and blood relative relationships and direct your estate towards those who have a legal claim on it. This can differ slightly from one State to another.

Who should I share the details of my Will with?
Your solicitor will be aware of them if they've helped you compile your Will, but it's also a good idea to run the contents past your accountant and financial planner in case there are any tax consequences that need to be factored into their planning for you. You should also inform your Executor of what your wishes are. 

How do I choose the right Executor of my Will?
Consider someone who will act in your best interests while also being capable of fulfilling the role. You should ideally discuss your Will with your executor first to ensure they're aware of their responsibilities and what's involved. Someone with some financial and administrative experience is an advantage.

If you would like to take advantage of obligation-free review of your current Estate Plan or would like support in compiling your Will contact us today on 5482 2855.

Top Tips for Christmas Credit Card Bliss!

On the 12th week before Christmas, my True Love gave to me… a budget plan to stay debt-free…As the heat continues to rise, 2017 is fast on its way out and with less than 12 weeks until Christmas Day, you can be forgiven for wondering where exactly the last 9 months went? So, in an effort to prepare you for both a debt-free and relaxed holiday season (and as a reminder to ourselves) we thought we would share some handy tips early, to ensure that your spending stays smart and 2018 greets you with abundance!


Top Tips for Christmas Bliss:
Make a list – actually make multiple lists:
1. Presents – who do you have to buy for, what is your budget for each person, what are you thinking of for them?
2. Christmas/Boxing Day & other social visits – what events are you hosting or attending? What do you need in way of food, decorations, and drinks? What is the budget?
3. Holiday travel – are you going anywhere? Maybe a road trip up the beach or for a trip interstate to see relatives. List everything you need to organise and shop around for deals.
4. Bag a bargain - In today's age of endless discounts and retail wars, you don't have to wait until the boxing day sales to find what you need a bit cheaper. Once you have your lists and know what you want to buy, you can start to scour catalogues, check out online stores and watch different items to get the best deal! Also, there is no shame in asking for a discount – most sellers these days are prepared to barter!
5. Share the load - Who says you have to bear a huge financial burden for gifts and events. Instead of buying presents for everyone, consider doing a family Secret Santa and just buy for one person. If hosting a get-together, ask friends to bring a plate of nibbles and drinks to share.
6. Pay with Points - If you have rewards points that you have been collecting and never seem to cash in, Christmas is a great opportunity to use them! Check your balance and see what is available to purchase, who knows the perfect gift for the kids might be waiting and ready!
7. Stalk Social - If you follow your favourite brands and retailers on social media, you may be able to get exclusive discounts through these social channels. Their newsletters may also alert you to sales and deals and there are also lots of discount or deal apps that you can use to find bargains
8. Track your trail - Keeping track of your festive spending is the best way to avoid going over your budget. Write down everything you buy and tick off your lists as you go.
9. Be Generous - be honest about your own needs this Christmas and if as a grown-up you don't actually need anything consider those that do and look at how you can give to a charity to support those in need.
10. Start Now – Once you've made your lists start buying now to spread the cost across a few months rather than a week.

Christmas is a great time to come together with family and friends to celebrate and relax. Make your Christmas a support act to a positive start of a new year by stripping back the spending and focusing on that which truly matters – time together!

What Is Bitcoin?

Bitcoin is a new currency that was created in 2009 by an unknown person using the alias Satoshi Nakamoto. It is what is known as a cryptocurrency and is the first decentralised payment system in the world. This means that transactions are made with no middle men i.e. no banks! There are no transaction fees and no need to give your real name when transacting with others. Year on year the popularity and acceptance of Bitcoin increases with more merchants beginning to accept the currency in their payment options. Right now you can buy a huge range of products and services with Bitcoin including web hosting services, pizza and even manicures.


Why is Bitcoin popular?
Bitcoins can be used to buy merchandise anonymously, they offer an easy international payment with no fess or regulation and small businesses may benefit from the no fee structure. Furthermore, Bitcoin is popular as an investment option with a few wins in past years, however, it is still volatile with little known about where this new technology will end up in the future.

Acquiring Bitcoins
You can buy Bitcoin from several marketplaces called "Bitcoin exchanges." These exchanges allow people to buy or sell Bitcoins using different currencies and trade it against other currencies. Furthermore, people can easily transfer Bitcoin to each other using mobile apps or their computers. It's a similar concept to how we currently do "online transfers" and you can acquire Bitcoin by accepting them as payment. The other way to acquire is to "mine" it – just like gold. However, the mining of Bitcoin is done digitally and is to be honest, complex. In its most primitive version, it is where people compete to create find the solution to a complex mathematical algorithm or puzzle and the person that finds the solution is awarded new Bitcoin. This is also how new Bitcoins are created.

Owning Bitcoins
Bitcoins are stored in a "digital wallet," which exists either in the cloud or on a user's computer. The wallet is a kind of virtual bank account that allows users to send or receive Bitcoins, pay for goods or save their money. Unlike bank accounts, Bitcoin wallets are not insured by the FDIC and the safety of these digital wallets are still unknown. Wallets that are in the cloud are open to hackers and there have been instances of people losing their Bitcoins in this way. If you keep your Wallet on your personal computer you are open to Virus attack or just like in the real world when you lose your wallet, you could delete them…

What affects its price?
The price of a Bitcoin has jumped up and down since it first entered the mainstream consciousness in 2013. That year prices rose by almost 10,000 percent before the collapse of Mt Gox, the biggest online Bitcoin exchange, sent it crashing. 
Prices slowly crept up after that but have since surged again. This is largely put down to regulators appearing to warm to Bitcoin and the rise of initial coin offerings - a way for projects to raise money by selling cryptographic tokens similar to Bitcoins. Many skeptics believe we are in the middle of a new Bitcoin bubble while advocates say we are just beginning to see the rise of Bitcoin.

Anonymity
Though each Bitcoin transaction is recorded in a public log, names of buyers and sellers are never revealed – only their wallet IDs are known. While that keeps Bitcoin users' transactions private, it also lets them buy or sell anything without easily tracing it back to them and in turn is one of the top methods of choice for people buying illicit contraband online or paying for illegal services. 

Future in question
No one knows what the future of Bitcoin encompasses or how it will play out. Right now it is a largely unregulated industry and system, however that could change if it continues to garner investment and support from the mainstream. Governments are concerned about taxation and their lack of control over the currency and also how it will affect international dollar values and economic activity. As an investment Bitcoin is a high-risk, highly volatile choice and the current lack of regulation creates a question to its validity as a long-term, income-producing investment asset in anyone's portfolio. This is a brief overview of the Bitcoin phenomenon and we strongly urge you, as with all investments, to ensure that you complete thorough and complete due diligence before venturing into new waters… or markets as it may be.

The RBA is keeping rates on hold for now, but the interest rate honeymoon might not last long! Amid growing speculation that the long period of very low, interest rates in Australia could be coming to an end, the Reserve Bank of Australia (RBA) has reported that it would attempt to avoid raising interest rates too quickly.


The financial markets' assessment of the likelihood of an interest rate rise in Australia by next March has risen from 32% to 52%, while an increase by next June is considered a certainty, however, there is concern that this might negatively impact heavily indebted Australian households and strangle economic growth. So, 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. 

Our role is to support our clients to ensure they are in the best finance options for their situation. We are currently offering a complimentary home loan health check - designed to ensure that you are in the right structure for you, and that you have access to the best possible loan option. And there's no time like the present!

    The Schuh Group Finance home loan health check will help you to answer the following:
  • Are you paying too much interest on your current mortgage? 
  •  Does your loan still meet your current needs? 
  •  Have your financial or personal circumstances changed? 
  • And if so, do you need different features and benefits from your loan? We can also help you look at your financial plans for the next 12 months and advise on how your loan products 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, 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 meaning we can help you compare loan products and choose one that suits your current financial circumstances and ensure that if rates rise you still have space to live. A saving of just a little on your home loan now, could add up to a significant difference over the life of your loan.
    To register for your free "Home Loan Health Check" please email one of the Schuh Finance team below or call David Schuh directly on 0400 224 615.
    Email the team today, have a new rate option tomorrow:

    David Schuh:     david.schuh@schuhgroup.com.au
    Jo Bennet:       jo.bennett@schuhgroup.com.au
    Dannii Herron:     dannii.herron@schuhgroup.com.au

    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.

    Accounting

    Streamline your financial life and reduce your costs with Schuh Group accountants. Consider us your business, wealth and financial success platform. Our extensive experience means we can take care of every aspect of your accounting.

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    We take an holistic approach to assesses your overall financial position in the context of your goals. We will ensure you are able to not only meet your short term goals, but also investigate the best approach for your business in the long term.

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    We help you plan for the future, from wealth accumulation, debt management & superannuation, through to self-managed Super & retirement & estate planning. Improve your tax effectiveness & create a financial road map to get you to where you want to be.

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