It's not too many weeks now before Christmas will be upon us, and most people have some downtime over the Christmas/New Year period. And while that's a great time to relax and catch up with the family, it's also an opportunity to stake stock of your finances. This week, we'd like to talk about getting your financial house in order.



To begin with, we'd suggest making a list: List out all of your income from work-related activities, as well as any passive income you may be receiving from investments. Then also list out all of your expenses, both on the personal side as well as on the business/investment side. How does this stack up and are you happy with the figures?

Next, list out all of your assets and liabilities. Include your home, vehicles, investments, superannuation, as well as any mortgages, overdrafts and credit card loans. Now, how do your assets and liabilities look?

In short, if you have more income and assets than expenses and liabilities, you're on the right path. The next step is to analyse how much of your income you're actually putting aside, and how much you're losing each month. This takes some time to look more closely at your "inventory." Do you have any assets that are actually sucking your income away? An Example might be a boat that you barely use, but is costing you money each year in registration and insurance. Now is the time to assess if those "assets" are actually not just hidden expenses, that you may actually be better off selling. Real assets are ones that increase in value over time or put money in your pocket.

Have a look at what you've been able to save over the year. Paying down a home loan or investment debt is almost like a form of "forced saving", but so is putting money into superannuation. Also take the time to get your tax work together if you haven't already, and submit that to your accountant. If you're entitled to a refund, the quicker your work comes in the quicker your turnaround time will be. And certainly, don't forget to dig out your Wills and enduring powers of attorney over the break. Check to see that your wishes are reflected in those documents and that you have the right people acting for you in the right roles. Is your executor still the best person to be in that role? Do you have young children that need guardians nominated for them? Run through these scenarios and make the changes as you need to.

As always, we're only an email or a phone call away, so please don't hesitate to contact us if you have any questions about getting your financial house in order and keeping it that way.

Who is Controlling the Finances in Your Life?

In many aspects of our lives we'll find ourselves either pursuing areas of expertise or delegating to those who can better utilise their skills for an improved outcome. Alternatively, you can watch DIY Youtube videos for guidance.



Setting aside internet expertise, these skills are often what forms our jobs or careers. A specific skill that we've honed, or a set of skills we've specialised in, so we can perform a role and contribute in a way that's valuable to a team. There's no need to know everything because if your workplace is focused on a goal, you may find people around you with another set of skills, equally as valuable to the common cause. The person sitting next to you in the office or standing next to you at a work-site may not do what you do, but they're equally complementary to the business.

This also happens in our personal lives. While we don't recruit partners based on their cooking or gardening skills (who knows, maybe that's why Gordon Ramsey's wife puts up with him), when in a relationship each partner may gravitate to areas they feel comfortable or where they feel have some expertise. Consequently, the other partner may pull back from the same area, feeling they have nothing to add. This can lead to one person having a greater amount of control over the finances.

It could be argued this is just another division of duties and one of the partners focusing on an area where they feel comfortable. However, there's a slight difference between business, the sporting field or the community organisation and your personal life. If the person beside you in the office leaves, they can be replaced by a new employee, player or volunteer with those specific skills needed. Meaning there's no requirement for you to step into their role.

Now consider this:

A divorce, a death, an illness or an injury may, remove one party from the relationship or render them instantly unable to continue with the financial undertakings. In the US 50% of first marriages end in divorce, while in 75% of marriages that end with a death, it's the female partner left behind.

What if the partner left behind is the one who didn't deal with the finances?

A 2015 study by US academics Adrian Ward & John Lynch Jr, titled 'On a Need-to-Know Basis: How the Distribution of Responsibility Between Couples Shapes Financial Literacy and Financial Outcomes' suggests this is a real problem. The partner who handles the household finances gets smarter and their money skills more valuable over time, while the spouse who defers on financial matters does not. Clearly anyone can quickly pick up cooking, laundry or start the hedge trimmer if needed, but finances can be daunting and difficult if there's no familiarity there. And in contrast to an investment portfolio, which generally works better the less you touch it, general finances don't do well when left alone. A lack of financial knowledge can be paralysing if a person is suddenly confronted with financial demands.

This exposes vulnerabilities. Who does the person turn to initially if they are now in charge of finances? Maybe there's a family member offering to help whose intentions are less than honourable. Maybe they won't be able to decipher a scam or know who to trust if attempting to seek financial or investment advice. Maybe they later enter into another relationship and again allow the financial responsibilities to be taken by the other party.

The academics suggest that in a relationship, an individual is no longer an individual, but part of an interdependent system where each partner relies on the expertise of the other. Essentially there's no need for them to know or understand a skill, they only need to know who knows it.

So what is the answer? When you're unsure, don't forget about the team of professionals you have at your fingertips. It is part of our job to keep you informed of your position and increase your level of learning. Never stop asking questions!

How Your Values Influence Your Wealth

We spend a lot of time discussing what the best strategies and tips are for growing your wealth position, but one thing we need to get clear on is why you're building or preserving wealth in the first place? This is a really important question - What does money mean to you? What's important to you about money?

When we lift the lid on these issues, we find that everyone has a different position on what they really want from their finances. Depending on your early relationships with money and how you were raised, you may hold "accumulating" as your main priority. This is not uncommon at all, and this mindset assists with creating a sense of security as well as achievement. On the other hand, some people are more disconnected from the idea that money can buy you nice things and therefore happiness.

At Schuh Group, our values around money stem from the understanding that the resource of money gives you choices, but that's as much as it can do for you. It's what you do with those choices that will give you the greatest sense of achievement and eventually contentment.

So to begin this line of thinking, ask yourself what's important to you about money in the first place. If the important things in life for you are family, health and experiences, then money can assist with this and your goals may be centred around providing for your children and family members. On the other hand, if you're interested in the perceived prestige that having money may offer, your goals will be more strongly aligned with making your financial resources work hard for you.

There's not necessarily a right or wrong answer to this as each person is different. We would however encourage you to get clear on what your priorities are, so that your wealth accumulation path can closely align with this. And if you're unsure of your priorities, remember the old saying that "your real interests lie in where you spend your time and where you spend your money." Scroll back through your bank statements and your calendar for some answers.

Happy New Financial Year!

This week we wanted to take a pause and ask you what does the new financial year mean for you?


For some, you may have just let out a big sigh of relief having gotten through the last one without any problems and are just happy that now you can leave it again until around April or May next year as the deadlines loom again. Or maybe you are thinking, no, this year I am going to keep on top of it all and start looking at some strategies now that can help me create wealth and keep on top of it all. The truth is that the right strategy is whatever works for you, your business and your goals.

Wealth and money are subjects that are personal for each of us. For some it may be about financial wealth, starting a portfolio, contributing more to super for retirement or looking at some ways to try and minimise tax. For others it may be more holistic, looking at all of these financial areas in conjunction with lifestyle goals and aspirations for the future and combining a long-term strategy with short-term objectives.

No matter what it all means to you, right now, the first week of the financial year is a great time to sit and reflect on your goals and strategies for the coming year. Over the coming weeks and months, we will be sharing a number of strategies with you to support you to continue to grow and prosper in life and business.

And our first tip this week – do your tax return early!

Start this financial year on the right foot and book in now to get your tax return complete. This will ensure that you are able to gather all the information your accountant may need before tax deadlines loom and if you are due to get a return then the money is better sitting in your pocket working for you. 

If you are ready to book in now or want to discuss any other financial worries, please contact us via email or just give us a call on 54822855.

First Quarter Review for 2018

Global economic data remained encouraging during Q1, though after a long period of relative calm and upward movement volatility again reared its head in equity markets. While towards the end of the quarter the potential for trade wars heated up. In the US, economic data continued to be supportive. US business confidence reached a multi-decade high in March. GDP for Q4 2017 was revised upwards to show growth of 2.9%, and while industrial activity slowed – as measured by the ISM manufacturing index – it continued to indicate expansion.

The US Federal Reserve raised rates by 25 basis points in March, from 1.5% to 1.75%. It did not, however, alter its overall rate projection of three hikes for 2018. This announcement quelled some concerns, but escalating US-China trade sanctions precipitated a renewed bout of turbulence in March.

In the eurozone, GDP growth for Q4 2017 was confirmed at 0.6% quarter-on-quarter and unemployment stable at 8.6% in January 2018. However, forward-looking surveys painted a picture of slower growth. The composite purchasing managers' index (PMI) hit a 14-month low in March and annual inflation was 1.1% in February, below the European Central Bank's (ECB) target. ECB chairman Mario Draghi noted interest rates would not rise until the end of the quantitative easing program.

While UK economic growth remained sluggish, in its February inflation report the Bank of England nudged up its growth forecast for 2018, from 1.7% to 1.8%. There was further progress with Brexit negotiations, with an initial agreement struck on the terms of a transition period for after the UK formally exits the EU.

The Japanese economy experienced a soft patch in Q1 2018 with many indicators of production and consumption slightly slipping. The most pervasive influence came from the switch in US policy towards increased protectionism. Investors were also taken by surprise by a sudden change in stance of players engaged in discussions on North Korea's nuclear ambitions.
In Australia, the Reserve Bank left its own benchmark cash rate unchanged for a record equalling 18th consecutive meeting at 1.5%, pointing to strengthening economic growth alongside continued low inflation.

The Bloomberg Commodities index turned negative in Q1. Weakness came from industrial metals amid global trade tensions. While copper was particularly weak, down 8.3%, energy again recorded solid gains. Brent crude continued to rally amid confidence OPEC would maintain production cuts throughout 2018.

And The Overview for Australia

Asset Class Returns; the following outlines the returns across the various asset classes to the 31st March 2018.

It was a mixed first quarter for global equity markets in 2018, with an upsurge in volatility from the very low levels of 2017 a major talking point.

US equities began 2018 strongly, buoyed by ongoing strength in economic data, robust earnings and the confirmation of a major tax reform package. However, the latter part of the quarter saw a marked increase in volatility. Investors first digested the destabilising potential of an elevated US inflation reading and the possibility that the Federal Reserve (Fed) may need to become more proactive in raising interest rates in order to keep upward price pressures under control.

Eurozone equities delivered negative returns in the first quarter, with the bulk of the declines coming in March. Markets began the year on a firmer footing but worries about the path of US interest rates and the outlook for global trade led to declines for the period overall. Sentiment towards UK equities was poor as the FTSE All-Share fell 6.9%. Overseas buyers shunned the market amid ongoing political uncertainty and a weak outlook for economic growth.

After a strong start to the year, Japanese equities followed a similar pattern to other global markets and ended the quarter 4.7% lower. The heightened uncertainty resulted in a stronger yen against major currencies. Corporate results to December 2017 showed very positive trends.

Emerging markets equities registered a positive return in the first quarter, despite a rise in market volatility stemming from tensions over global trade. The MSCI Emerging Markets Index recorded a positive return and outperformed the MSCI World and although Chinese equities were volatile towards the end of the quarter, given rising trade tensions with the US, the market recorded a positive return and outperformed.

Australia was dragged down by its heavyweight banking sector as the potential impact of the Banking Royal Commission began to weigh. In sectoral terms, the other big losers on the Australian market were telecommunications stocks, utilities, REITs and energy.

If you would like to understand how any of the recent global activity has impacted you or would like to understand how investing can support you to reach your goals, give the Schuh Group Wealth Managers a call.

With thanks to DFA Australia for charts.
This material is provided for information only. No account has been taken of the objectives, financial situation or needs of any particular person or entity. Accordingly, to the extent that this material may constitute general financial product advice, investors should, before acting on the advice, consider the appropriateness of the advice, having regard to the investor's objectives, financial situation and needs. This is not an offer or recommendation to buy or sell securities or other financial products, nor a solicitation for deposits or other business, whether directly or indirectly.

How to Help Your Kids Get Out on Their Own

A lot has changed since the baby boomers and older Gen X'ers were their children's age. Generally, back in their "younger years", they would not have found themselves living at home with Mum and Dad into their late 20's and possibly their early 30's. This trend to "stay home as long as possible" which is increasingly prevalent with many Gen Y'ers & Z'ers either choosing to stay at home or having to stay at home because of costs. Statistics cite that nearly 25 per cent of people aged 20 to 34 continues to live in the parental home in 2018 and that the trend is only going to increase.

So How Can You Help?

Well for many Gen X'ers and baby boomers with kids still at home (that maybe should have moved on a few years ago), it is really about helping your kids to "fly the coup" while also protecting them at the same time. So, let's look at some of the main reasons as to why children haven't left home and some tips on how you can best help them out of the nest and into their own place.

 Housing Affordability:
One of the biggest causes of "kids staying longer" is housing affordability – both renting or saving for a house deposit seem to be harder each year. We have seen property prices and rents escalate dramatically in some areas without the growth in wages to match. With this in mind, your goal needs to be to teach your children good savings habits from as young as possible. Living at home can create a sense in your children that they have a large disposable income, so money may be spent on non-essentials and entertainment. This is then a habit that continues through later life. Start by helping them create a budget with a savings plan included and support them to understand how to prioritise their spending and forgo (sacrifice) those items that are not necessary. It will be important for them to know that the accumulative effect that their daily coffee or weekend outing costs. If they're working, encourage them to save at least 20% of their weekly income into an account they can't easily touch.

University Fees and Living Costs:
University fees and the cost of living whilst at Uni is also another reason why children are staying in the nest longer. Hopefully, if you do have an adult child living at home they are doing a little bit of work to help supplement their living expenses. If they aren't it may be wise to give them a push in that direction. As much as it may pain you to talk about it, now is a good time to start educating your children on personal finances. We suggest that you talk to them about the monthly expenses you are paying on their behalf and the student loan that they are accruing. Talk to them about reducing any debt they've accumulated and discussed interest rates with them, pointing out they should be paying off the highest interest debts first. Whilst they may not want to pay much attention at this time in their lives, the goal is that when they finish university they will find a job and be faced with managing their own finances so by ensuring they are in the know you are going to help give them a flying start when they're off on their own.

Job Security:
Lastly, job security also plays a strong role in why kids are staying longer. From not being able to find a job after university to becoming unemployed through restructuring or redundancy, loss of income is not just an emotional time for those involved it also creates socio-economic limitations. The important key to helping your kids if they are out of work and struggling is to remind them that periods of unemployment happen, but they need to "bounce" quickly and get back out there. And be sure to not sacrifice too much yourself. You are also at a stage in life where you should be creating wealth for retirement, meaning your support for them must be balanced with your own goals at this time. If they are making a little money, ask them to pay some rent and then agree on some responsibilities such as cooking dinner, cleaning and washing that they can do to help out. You are not a hotel, and the responsibility will also help them to stay on track and get back to work faster. Give them a timeframe on how long they can stay back at home, make this realistic but not too long. We have all had dreams of becoming rock stars or the next Warren Buffet but sometimes career expectations need to be managed. Giving your kids a timeframe on how long they can stay will put boundaries in place and give them an understanding of what is needed right now. With work, it is generally easier to get a new job when you already have one.

Across all circumstances, it is important to share the responsibility of living with your children – financially, emotionally and practically. Be transparent and honest with them and support them to understand money so that they can make better decisions.

We hope you have found some useful tips in this week's "Money in Life" series. Remember we are only an email or phone call away if you would like to seek advice on how to help plan your family's wealth now and into the future.

 

Starting a family, whether planned or unexpected is a time of great joy and for most some fear, panic and overwhelm. Bringing children into the world will generally bring with it quite a large change to your existing financial position and presents its own unique set of challenges and considerations.

There are differing figures all over the internet about the cost of raising a child in the Twenty-first century and some of them can be quite daunting. From $233,610 to raise a child born in 2015 to the age of 17, up to $406,000 to raise a child back in 2013. Regardless of the figure, the fact that remains is that having a child and being able to comfortably support them, continue to live your life and ensure that you have adequate protection in place requires planning and consideration. Below are some tips and also some questions you need to ask yourself when starting a family:

1. To start saving for a baby you might need to consider if you need to cut down on some expenses, especially if you don't have much of a budget surplus and savings plan already in place. This will also be good practice if you are going to stop working once your baby is born and particularly if you are going to take unpaid maternity leave for any length of time.

2. Adequately assess what items you may need to buy in advance. This could be things for the baby's nursery through to upsizing your car or making renovations to your home or moving to a bigger home or unit if you rent.

3. Prepare a budget and try to stick to it during the 9-month period. This will ensure that you have enough funds to pay for the extra baby items you'll need when they arrive. Once they arrive it will be important to sit down and review your budget regularly based on their needs and requirements.

4. Research what parental leave you are entitled to with your employer. Ask the questions "how much time do I get off?" and "how much will I be paid and how long for?" This will help you to decide if you need to increase your savings before having a baby. If you decide you don't want to go straight back to work once your paid entitlements end you will need to assess how much you will need for the length of time you take off and then budget and save accordingly.

5. Look at your health insurance, does it cover the birth costs for your baby? Will you be able to have your baby where and how you want to? Will your current health insurance cover your little one when they are born, or do you need to update it?

6. What will happen if something happens to you or your partner at this crucial time? Where will your income come from if you are unable to work and have a new mouth to feed? Make sure that you have adequate protection in place that will give you peace of mind if something did go wrong.

7. If you'd like to send your children to private school, start saving for that straight away. The cost of private schooling can be in the tens of thousands each year, so it's best to start building a nest egg for this cost as soon as the child arrives.

8. Do you need to update your Will? Having a child is one of those life events that require a revision and updating of your Will. You want to ensure that if something happens to you that your estate is in order and the people that need to benefit from it do. And don't forget to nominate a guardian for your child.

And remember, we are only an email or phone call away if you would like to seek advice on how to help plan your families' wealth now and into the future.

Buying a house has become somewhat of a dilemma for our Gen Y's and even potentially some Gen X's due to the increased price of housing, particularly in our Eastern capital cities. When you start thinking about buying a house it is important to be clear on what you can afford and then work backwards from there. 


When deciding on your "first house budget," begin with the facts and look at how much you can afford in terms of mortgage repayments, particularly if the house is going to be your primary place of residence. This will then help you work out how much you can borrow and what your deposit will need to be. There are some great calculators available on bank websites that can help you work this out.
Once you do this you will have a good idea of a purchase price that is affordable for you. The other option here is to go into your bank or give them a call and tell them you want to work out how much you could borrow to purchase a house and what deposit you may need.

Tip – With interest rates at an all-time low be careful not to over-borrow. It is important to think forward and be realistic in terms of what sort of impact an interest rate rise would have on your cash flow if you had a mortgage. Would a 1% rate rise put you under financial stress, could you handle the increase in repayments and still live comfortably?

The next big step is the deposit. Where is it going to come from? Are you going to have to save it or maybe your parents would be willing to gift you the deposit (or loan it to you) or they might offer to go as a guarantor to help you out. If you need to save then the first place to start is creating a budget. You would have received our budget planner last week and we have included it again this week in case you missed it. Using this template you will be able to work out how long it will take you to save your deposit based on your current surplus cash flow. From here it will be best to open a high interest earning account to save your deposit, it may be an idea to shop around and find an account that makes it harder for you to withdraw from whilst encouraging you to save – accounts like ING seem to have good parameters around this. Then it is all about getting into the habit of saving regularly for your deposit which will help you over the long-term as this is the exact same discipline you will need to apply when you're eventually paying down your mortgage. In the May 2017 Budget the Government announced a plan to save for a first home deposit through Superannuation called the 'First Home Super Saver Scheme' which has not been legislated as at January 2018 but it may be worthwhile to keep an eye on this as an option to give your deposit a boost. 

For some of the people reading this item, it may not be the first house you are buying and you may be considering purchasing property as an investment… Our tips here are to look at the rate of return that you would receive from the property. At the moment we are generally seeing around a 2% to 3% income return on residential investment property so unless there is a significant lift in the underlying value of the property, you may want to look at diversifying your investable funds into other asset classes such as shares. Diversification is a word you will hear us talk about regularly. Basically it is spreading your investible funds across different asset classes like shares, property, fixed interest or cash. The allocation that you put toward each of these asset classes comes down to the returns you are seeking and your level of comfort with risk. It is also important to look at the liquidity of your investible assets (how easily you can sell them) and the time frame you want to invest them for.

Tip – If you are looking at property as an investment option and are going to be looking at a buy/sell strategy, make sure you speak to your financial adviser or accountant about taxation issues such as capital gains tax and always take into consideration the fees associated with buying and selling property as this will affect your rate of return.

We hope you have enjoyed this week's "Money in Life" series and remember we are only an email or phone call away if you would like to seek advice on how to help grow your wealth now and into the future.
January is a great time to buy a car. Car dealers all over the country will be clearing last year's stock at knock-out prices. So if you want to take advantage of the New Year car sales, get ready by talking to us about your finance now.



Why talk to us?
It's important that you get a car loan that's affordable, competitive and tailored to fit your personal financial circumstances and goals. Car dealership finance is not tailored to individuals – it's often locked in to the full price of the car and repayment terms can sometimes be too short for many people to afford.
So to make sure you don't miss out on a great car deal, ask us to help you organise your finance now. We'd love to help make your New Year a happy one.

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

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.

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

    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

    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.

    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.

    The Australian sharemarket fell on Wednesday at the open as the new bank liability-levy hit the lenders, but it soon spiked higher on optimism policy certainty would be good for the domestic economy. The S&P/ASX 200 index dropped 0.4 per cent at the open as bank dividends looked threatened, but push-back against the levy encouraged bargain hunting in the Big Four and it ramped to a 0.8 per cent gain. The index slipped and closed up 35.5 points, or 0.61 per cent, at 5875.4 with miners rallying on firmer iron ore prices and $75 billion in fiscal infrastructure spending plans over 10-years supporting industrials. The Australian dollar bounced US0.3¢ off its overnight low to US73.60¢ amid optimism the Budget would help retain Australia's AAA credit rating. Government 10-year yields dropped 2.4 points to 2.658 per cent.


    What this means for you:
    With the Federal Budget released on Tuesday night we were surprised and perhaps a little happy that there were no changes to superannuation announced. This is good news, as we are still working with clients on the changes that are already legislated to take effect on July 1.

    The main changes in the budget that may be of benefit to clients are the first home super saver scheme and the changes to downsizing for older Australians. Here, we will talk about the first home super saver scheme.

    First Home Super Saver Scheme
    With house prices high in many parts of the country, young Australians are entering the housing market later in life than in previous generations. A key difficulty is saving a deposit. From 1 July 2017, individuals can make voluntary contributions of up to $15,000 per year and $30,000 in total, to their superannuation account to purchase a first home. These contributions, which are taxed at 15 per cent, along with deemed earnings, can be withdrawn for a deposit. Withdrawals will be taxed at marginal tax rates less a 30 per cent offset and allowed from 1 July 2018.

    For most people, the First Home Super Saver Scheme could boost the savings they can put towards a deposit by at least 30 per cent compared with saving through a standard deposit account. This is due to the concessional tax treatment and the higher rate of earnings often realised within superannuation. Many employees will be able to take advantage of salary sacrifice arrangements to make pre-tax contributions. Individuals who are self-employed or whose employers do not offer salary sacrifice can claim a tax deduction on personal contributions, meaning savings effectively come out of pre-tax income.

    Voluntary contributions under this scheme must be made within existing superannuation caps. The total concessional contributions an individual can make, from both compulsory employer contributions and voluntary contributions, including those made under the scheme cannot exceed $25,000 in 2017-18. The amount of earnings that can be released will be calculated using a deemed rate of return based on the 90 day Bank Bill rate plus three percentage points (as per the Shortfall Interest Charge). The First Home Super Saver Scheme will be administered by the ATO, which will determine the amount of contributions that can be released and instruct superannuation funds to make these payments accordingly. This measure will assist first home buyers to save a deposit for their home faster.

    First Home Super Saver Scheme Case Study:
    Michelle earns $60,000 a year and wants to buy her first home. Using salary sacrifice, she annually directs $10,000 of pre-tax income into her superannuation account, increasing her balance by $8,500 after the contributions tax has been paid by her fund. After three years, she is able to withdraw $27,380 of contributions and deemed earnings on those contributions. Her withdrawal is taxed at her marginal rate (including Medicare levy) less a 30 per cent offset. After paying $1,620 of withdrawal tax she has $25,760 that she can use for her deposit. Michelle has saved around $6,240 more for a deposit than if she had saved in a standard deposit account. Michelle's partner Nick has the same income and also salary sacrifices $10,000 annually to superannuation over the same period. Together they have $51,520 that they can put towards a deposit, $12,480 more than if they had saved in a standard deposit account.
    If you would like to discuss how you can take advantage of this scheme, contact Dominique Schuh today on 5482 2855.

    If you do not service your home loan regularly in the same way you service your car you could be missing out on thousands of dollars of savings every single year.

    Taking the time at least once a year to review your structures and opportunities could provide you with remarkable savings that could boost your day to day living, provide investment equity or at the very least give you the peace of mind that your current loan is the best option and working well for you! The thing is that even small changes to interest rates and fees can make a huge difference over the lifetime term of your loan.
    Refinancing your more expensive home loan is often a very simple process and the thousands of dollars of potential savings are well worth the effort. Furthermore, the opportunity to obtain a lower interest rate; the chance to shorten the term of their mortgage; the desire to convert from a fixed rate to variable rate or vice versa; the opportunity to tap into your equity in order to finance a large purchase; and the desire to consolidate debt provide strong motivation to at least review your current loan and lender.

    Refinancing can be a great financial move if it reduces your mortgage payment, shortens the term of your loan or helps you build equity more quickly. When used carefully, it can also be a valuable tool in getting your debt under control.
    If you haven't switched to a securely funded lower rate home loan then simply ask yourself - why not, as you consider some of the following key questions:

    1. Am I paying an unreasonably high-interest rate?
    2. Am I paying outrageous fees?
    3. Am I frustrated by inadequate service?
    4. Does my loan give me the features I need?
    5. Am I paying for features I don't use?
    6. Have my financial circumstances changed?

    To make life easier for those wishing to check their home loan the Schuh Group Finance team are offering free consultations and reviews. With access to over 30 lenders, we will ensure that you have the information you need to choose the best option for you, we will also guarantee you the best rate available to you on any day. Plus, if you refinance with Schuh Group Finance this March or April, you will go in the draw to win a $2,500 Flight Centre voucher.

     

    Investors spent most of Wednesday anxiously awaiting an address by US President Donald Trump, with shares trading listlessly sideways before finishing the day marginally in the red. Buying in the banks and modest interest in utilities were not enough to keep the ASX supported, with Telstra weighing heavily on the bourse as it traded ex-dividend. Wall Street indexes rallied on Wednesday, with the Dow hitting a record above 21,000 points, while the dollar and U.S. Treasury yields jumped as investors bet that a U.S. interest rate hike would come soon.

    What this means for you:
    If you're thinking you'd like to make a large contribution to superannuation, this is the financial year to do it in. Until the 30th June, the after-tax (non-concessional) contribution limit is $180,000 per person, and you can even contribute 3 years worth of that amount into super in one go, making it $540,000 on offer if you're under the age of 65. As of 1 July 2017, the non-concessional contribution amount will drop to $100,000 per person, meaning the 3 years bring forward amount will also drop to $300,000 per person.

    Many people trying to break into the housing market are making use of parental help in the form of a deposit. We suggest any large amount of financial help given to your children is treated as a "loan" rather than a "gift", with something in writing to support this. The reason being – your son or daughter gets into a relationship breakdown, any "gifted" amount can potentially be up for grabs in a property settlement, whereas a "loan" will need to be repaid to the parents, with only other assets left behind being included in a settlement.

    You already know that you can rely on us to give you expert advice in all things home loans. And having the right product for your life can make all the difference when it comes to meeting your financial goals. If you are re-financing, down-sizing or buying your first home, we are here to help you find the most suitable loan for your needs and to help you achieve your financial goals.


    But did you know we do so much more than home loans? We're experts in all kinds of credit and financial services and our aim is to make it easy. You can get everything you need under the one roof, including:

    1. Car loans
    2. Home Loan Refinance
    3. Property Investment Loans
    4. Personal Loans
    5. Lifestyle loans – including boats and motorbikes
    6. Honeymoon loans
    7. Bridging loans
    8. Property Development & Construction Loans
    9. Insurance

    And loads more! Whatever your goals, our job is to help you achieve them. We have access to a wide variety of different lenders and no matter what you want to buy, it is important that you find a solution that best suits your needs, budget and personal requirements. You can expect us to identify which products are most suitable for you and what you aim to achieve and to help you choose the correct solution. So why wait? Let us help you get a loan in place that's right for whatever you want to do next. To find out more, just call David Schuh today on 0400 224 615, or contact one of our finance team direct:
    David Schuh david.schuh@schuhgroup.com.au
    Jo Bennet jo.bennett@schuhgroup.com.au
    Dannii Herron dannii.herron@schuhgroup.com.au.

    The Australian sharemarket finished in the black as Reserve Bank growth optimism and rebounding iron ore prices buoyed sentiment. Wall Street finished flat last night, but after a choppy start the S&P/ASX 200 index rallied to close up 29.5 points, or 0.52 per cent, at 5651.4 as investors flipped back into the banks and miners climbed. U.S. stocks were little changed late Wednesday morning as investors assessed a flood of quarterly earnings reports. More than half of the S&P 500 companies have reported results so far, with their combined earnings estimated to have risen 8.2 percent - the most in nine quarters.


    What this means for you:
    What do you do once you've paid your house off? If you're in the fortunate position of having good income, you can use the equity you have in your home to borrow funds and invest in other assets. Preferably those assets will be income producing, which will then allow you to direct additional income streams to paying down the investment debt over time. We often forget about the borrowing power we have in our own homes, and how this can be utilised for wealth creation.

    In the last 10 years, the average Australian home loan amount has nearly doubled. House prices continue to soar and affordability is quickly diminishing. Regardless of your stage in life, paying down the mortgage has never been more important. There are two key things you need to understand about your home loan. Firstly, the interest payable isn't tax deductible and so paying it down quickly should be your first priority. That is unless you have credit card debt or a personal loan with a higher interest rate, which should then become your first priority. Secondly, you'll be paying the most interest in the first few years of your loan as the principal amount is at its highest. So, the sooner you can get onto reducing that principal the better off you'll be because your interest will start reducing right away.

    So short of finding a secondary income stream, here are some of the best ways to get that loan amount down asap. Refinancing to a lower rate may seem obvious but many people delay this simple move for a number of reasons. Some may be put off by the complexity of switching lenders, especially when they have all their financial products with a specific bank. For others, it may be finding the time to get around to it. But unless switching means paying another round of Lenders Mortgage Insurance or pricey exit fees, refinancing to a lower rate can save thousands in the long run.

    Most home loan repayments are calculated on a monthly basis. But fortnightly repayments can serve you in two ways. Firstly, they allow you to squeeze in the equivalent of one extra monthly payment per year. For example, assuming your monthly repayments are $2,000, in a year that means you would have paid off $24,000 ($2,000 x 12). If you're paying fortnightly, you divide your monthly amount in half which makes it $1,000. As there are 26 fortnights in a year your total repayments become $26,000 ($1,000 x 26). This extra amount you've paid comes directly off your loan principal, which in turn reduces the amount of future interest calculated, meaning you pay off your loan sooner.

    Income stream versus capital growth in retirement? We often here about people wanting an income stream from their investments in retirement, which makes sense if they are no longer earning an income from work activities. But don't forget, if your retirement assets are held in "pension" phase in your super funds, these will be considered "tax free" and no capital gains tax will be payable if you sell them. The most important factor in retirement is the overall return you receive, not necessarily whether it comes from income or capital gains.

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