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 These contributions, which are taxed at 15 per cent, along with deemed earnings, can be withdrawn for a deposit.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.

Heavy profit-taking in the major banks and miners hit the Australian sharemarket as market pundits warned the lenders were overbought and house prices faced downside risks. Wall Street edged higher last night, but after slipping 0.3 per cent in early trade, selling accelerated mid-session and the S&P/ASX 200 index crashed through technical support at 5900 points. 

The Australian dollar lost US0.4¢ to US74.90¢ and government 10-year yields were marginally lower despite a 4 point drop in US 10-years to 2.28 per cent.


What this means for you:
Our attention over the next week will be turning towards the Federal Budget which will be released on Tuesday. In the lead up to the budget Australian Treasurer Scott Morrison has been making reference to "good vs bad debt". You may ask what is "good" debt and what is "bad" debt. Basically good debt is an investment in your future like a mortgage for an investment property. Bad debt is debt incurred to purchase things that quickly lose their value and/or do not generate long-term income and generally carries a high interest rate, like credit card debt or the mortgage for your home.
If your bad debt is getting out of control it may be time to go back to basics and do a budget. Take a good look at what you are spending money on and follow this general rule to avoid bad debt - If you can't afford it and you don't need it, don't buy it.

Can Global Events Impact on Your Super Strategy?

The Australian sharemarket belatedly caught up to the global relief rally on the outcome from France's presidential election. Having lagged on Monday with a 0.3 per cent gain, the S&P/ASX 200 index climbed 40.2 points, or 0.68 per cent, to 5912 after the US S&P 500 index gained 1.6 per cent over two sessions on relief France was set to elect centrist, pro-euro Emmanuel Macron as president on May 7.


The bounce in global stocks also raised hopes the global reflation rally would gain fresh impetus, prompting some rotation from bonds into stocks. US 10-years to 3 points to 2.30 per cent, while Government 10-year yields rose 3.5 points to 2.63 per cent as consumer inflation came in at 2.3 per cent, below the consensus forecast but in the Reserve Bank's target range for the first time in almost three years. The Australia dollar lost US0.5¢ to US75.10¢ as higher US yields strengthened the US dollar against most currencies except the euro.

What this means for you:
For most people events like the French election have little impact on their lives but global events like this can have an impact on our superannuation and other investment funds particularly if there's exposure to global markets. When we meet with clients to discuss their superannuation and investments we always look at their risk profile so we have a strong understanding of how they feel, and how they would react to movements in global markets.

This risk profiling along with understanding our clients goals ensures that we recommend the most appropriate superannuation or investment accounts for our clients. If you would like to find out more about reviewing your superannuation or investment goals then give us a call.
If you would like to review your current structures, contact us today on 5482 2855.

The Low Down on Coming Changes to Super

As you may already be aware, there are some superannuation rule changes coming into play from 1 July 2017. Therefore, it may be in your interest to take advantage of the current opportunities before the financial year ends.


* At any time during this financial year Please note, if you're 65 or over at the time of making a contribution, a work test must first be satisfied.

Total pension amounts will be limited From 1 July 2017, if you're converting your super into a pension to derive an income in retirement you'll be restricted to transferring a maximum of $1.6 million into a tax-free pension account, not including subsequent earnings. If you already have a pension balance above that, the excess must be placed back into the super accumulation phase (where earnings will be taxed at the concessional rate of 15%) or taken out of super completely before 1 July 2017 to avoid potential penalties.

Also note, if you do transfer $1.6 million into your pension, even if your balance reduces over time, you won't
be able to top up your pension a second time. Transition to retirement pensions will lose their tax exemption Investment earnings on super fund assets that support a pension are currently tax-free. However, this will no longer apply to transition to retirement (TTR) income streams. Earnings on fund assets supporting a TTR income stream will be subject to the same maximum 15% tax rate that applies to super accumulation funds from 1 July 2017.

Opportunities before 30 June 2016
Take advantage of the higher concessional contribution caps before these drop to $25,000 for everyone.
Consider making a larger non-concessional contribution this year in order to maximise what's in super.
Revisit whether you need to continue your transition to retirement if you're not yet 65. It may be worth your while to place the funds back in accumulation mode if you don't need the pension income for your cash flow.

As always, please contact us on 5482 2855 if you'd like personalised advice in this area.

Tumbling commodity prices on rapidly fading global reflation hopes dragged the Australian share market lower again this week but bargain hunting in the major miners and telcos helped trim losses. Following a 0.3 per cent loss on the US S&P 500 index, the S&P/ASX 200 index opened almost one per cent down, before bouncing to 0.2 per cent loss as a rally in iron ore futures boosted miners. Selling returned and it held above the psychological 5800 point level to close down 32.7 points, or 0.56 per cent, at 5804 on volume 17 per cent above average. The Australian dollar dropped US0.6¢ to US75.20¢ despite broad US dollar weakness as the deteriorating commodity outlook weighed on the Aussie. Currency market volatility spiked and the British pound leapt 2.2 per cent against the greenback and 3.2 per cent against the Aussie after the surprise announcement by British Prime Theresa May of a snap June 8 poll to secure a strong mandate for Brexit negotiations.


What this means for you:
The thing still dominating our immediate world at the moment are the superannuation changes coming into effect on July 1. From 1 July 2017, the general concessional contributions cap will be lowered to $25,000 (2017/2018 year) from $30,000 (2016/2017 year), and the over-50s cap of $35,000 (2016/2017 year) will be dead from 1 July 2017. So if you are making general concessional contributions you only have a little over two months to take advantage of the higher caps.

The one upside to the cut in the annual concessional (before-tax) contributions cap, is that the government has introduced catch-up concessional contributions. The catch-up contributions opportunity was initially planned from 1 July 2017, but the measure has now been delayed. Instead, the start date for the catch-up provisions is 1 July 2018. What this new measure means is that unused portions of the concessional cap each year can be carried forward on a rolling basis for up to 5 years, for the annual caps applicable from July 2018, but only if you have an account balance of less than $500,000. If you would like to find out more about concessional contributions and the changes to superannuation, give us a call.

The Australian share market swung in and out of the red before closing firmer as iron ore prices fell and geopolitical tensions drove buying of safe-haven government bonds. The S&P/ASX remained in outperformance mode as it opened 0.3 per cent up on insatiable demand for the major banks, but it dropped to a 0.2 per cent loss and bounced again to close up 4.7 points, or 0.08 per cent, at 5934. Weaker Chinese inflation data signalled the reflation narrative was rapidly losing steam. The Australian dollar has fallen as global concern rises over the conflict in Syria and tensions on the Korean peninsula. At 6.30am AEST, the Australian dollar was at 74.96 US cents, down from 75.03 cents on Thursday.


What this means for you:
We've got some superannuation changes that are fast approaching as we get closer to 1 July. One of these changes is the tax effectiveness of the Transition to Retirement Pension, with the earnings on your pension assets no longer being tax free. Our suggestion would be to cease taking a transition to retirement pension if you don't need the income to support your lifestyle.

With the current international events around Syria and North Korea, a lot of people are asking what our opinion is on the future. The only certainty is uncertainty, when it comes to future events. However, if you have a well-structured and diversified investment portfolio, you'll be able to ride out all the ups and downs that may or may not happen.

Market Wrap For The Week That Was

An overnight rise in commodities lifted miners but the Australian share market swung in and out of the red as housing market related risks hit domestic-focused stocks. Wall street closed marginally firmer last night, but the S&P-ASX 200 index opened 0.4 per cent up before sliding 0.2 per cent into the red following another official warning about mortgage lending risks and the need for higher capital levels. But bargain hunters stepped into buy the banks and the index rallied to close up 19.7 points, or 0.34 per cent, at 5876.2. The Australian dollar is trading at 76 US cents.


What this means for you:
With the current wet weather, people who have their house in order won't have anything to worry about in terms of leaks and property damage. But when was the last time you really got your "financial house" in order? Is everything working as well for you as it possibly can be? This includes your investments, your savings accounts, your loan structures, estate planning, and of course insurances. Your "financial house" is what pays for the physical house, so make sure you review it regularly.

Are interest rates on the way up? We don't know for sure, but if they are, it may mean property prices will also cool off a little. So, all is not lost if you miss out on the lower interest rates, as you may be able to pick up a new property at a reduced price. Sometimes there is a silver lining.

Are Interest Rates on the Way Up?

The major banks and miners combined to drive the Australian share market to a 23-month high as investors ignored soft iron ore prices and flat earnings forecasts. The S&P/ASX 200 index continued to outpace other global markets as it climbed 52.3 points, or 0.9 per cent, to 5873.5 as investors shrugged off last week's disappointment over US healthcare policy and remained optimistic over the global reflation narrative. The Australian dollar bounced US0.5¢ from its overnight lows to US76.40¢.


What this means for you:
With the current wet weather, people who have their house in order won't have anything to worry about in terms of leaks and property damage. But when was the last time you really got your "financial house" in order? Is everything working as well for you as it possibly can be? This includes your investments, your savings accounts, your loan structures, estate planning, and of course insurances. Your "financial house" is what pays for the physical house, so make sure you review it regularly.

Are interest rates on the way up? We don't know for sure, but if they are, it may mean property prices will also cool off a little. So, all is not lost if you miss out on the lower interest rates, as you may be able to pick up a new property at a reduced price. Sometimes there is a silver lining.

What You Need to Consider Before Tying The Knot

Getting married is a milestone in anyone's life. It is a time filled with excitement as you research and plan your perfect day to celebrate your love and say I do and then dive into details of a romance-filled honeymoon! For many couples, the planning of the actual wedding and honeymoon take precedence over the boring and not as exciting planning of the future... However, just as important as the dress, the cake and the destination of that one big day, is the day-to-day realities of how you will plan, save and invest for your future.

Money can be one of the primary sources of disagreement in a relationship, and that is why before you say I do it is important that you and your partner take the time to discuss and agree on a "money plan." This includes understanding how tying the knot can impact your financial obligations and potentially affect how you structure your finances. Keep in mind, however, that finances and taxes can vary greatly depending on an individual's or a couple's specific situation. We recommend consulting a qualified professional to discuss your personal situation and get the best plan in place for you. 

Here are three things to consider when it comes to how marriage and money can work together:

1. Decide on a personal spending amount and keep it separate. One of our main cashflow strategies is to separate your weekly personal spending from your other money that's used for bills, investments and savings. Transfer your weekly spending amount to your spending account and use this money to cover gifts, dining out, transport and groceries – all the day to day spending. This works for couples because you each have your own allocation of personal spending deposited into your individual bank accounts, and you each have discretion over how you spend your weekly allocation. Just try and stick to the determined amount! Then with your remaining cashflow, you can set up automatic payment of bills and investing for your goals.

2. Set your goals together. If you're wanting financial success, you both need to know what you're saving and investing for in order to stay motivated, and also to ensure you don't dip into those savings. It's so important to set those investment goals together so that you're aligned and both planning for the bigger picture. Put a plan in place together and then you'll have a much better chance of reaching your goals.

3. Update your Wills. Getting married actually cancels any previous Will that you already had in place, so make sure you visit your solicitor soon after to get another one done. If you, unfortunately, pass away before having done this, you'll be deemed to have died "intestate" (without a Will), which makes estate planning a lot more complicated and time-consuming for the remaining spouse. Also, revisit your nominated beneficiaries on your super funds. Remember that a spouse can receive a super benefit tax-free.

If you would like support to put a plan in place or review your current strategy the Schuh Group Financial Planning team offer free consultations and are happy to support you in reaching your together goals. Contact Dominique Schuh direct at dominique@schuhgroup.com.au. or the Schuh Group office on 54804877.

Fading hope for "Trump reflation" was the main catalyst for the Australian share market falling the most in four months, but intensifying Chinese banking risks compounded the pressure on miners. The S&P/ASX 200 index tumbled 90.1 points, or 1.56 per cent, to 5684.5 as it followed the 1.2 per cent fall in the US S&P 500 last night, its biggest loss since November, after equity markets finally reacted to warnings President Donald Trump would struggle to implement his pro-market policies. The Australian dollar is trading at 76.78 US cents at the close Wednesday.


What this means for you:
When the mining shares in Australia drop, our whole market tends to come down for the day as well. This is because our hare market is highly concentrated with either mining-related or financial companies. Don't neglect holding some international shares to increase your exposure to other industries such as manufacturing and pharmaceuticals.

While it's still a little way off, from 1 July 2018, people with superannuation balances of less than $500,000 will be able to access their unused concessional contributions cap space to make additional concessional (before-tax) contributions. Individuals will be able to access their unused concessional contributions cap space on a rolling basis for a period of 5 years. Only unused amounts accrued from 1 July 2018 can be carried forward. This will be a handy way for people with smaller account balances to top them up where possible.

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.

 

Should You Consider Salary Sacrificing?

The Australian share market reversed early losses to finish in the black following soothing words from Chinese Premier Li Keqiang. He said China would fasten its "seat belt" and rein in risks as it pursued a mid- to high-speed growth, while he also played down risks of a trade war with the US and said the country would continue to support global growth. The S&P/ASX 200 index bounced to close up 14.9 points, or 0.26 per cent, at 5774 as markets shrugged off US rate rise caution.

What this means for you:
We talk a lot about the benefits of salary sacrificing, but do you know when to consider it? The decision basically comes down to two things: 1.) whether your personal taxable income is greater than around $37,000, and 2.) whether you can do without the money as "take-home pay". If your taxable income is over $37,000, there will be a tax saving for you to do some salary sacrificing, particularly by contributing to super where the tax rate is lower at 15%. However, you need to find a balance between keeping enough money aside to be able to live on.

Do you have savings goals? Consider setting up separate fee-free online accounts to automatically save into from your income. This is a similar concept to the "jam jar" saving strategies of old, but it really works. If you've got a home loan, contact your bank to see if they'll allow you to set up separate offset accounts against your home loan. That way you can still do your saving for specific items such as holidays, and reduce your home loan at the same time.

The Australian share market finished flat on Wednesday, as investors remained focused on the release of jobs data in the United States later this week. In choppy trade - the S&P/ASX200 barely moved, down 2 points (less than 0.1 per cent) to 5759.7, while the broader All Ordinaries Index lost 2.5 index points to 5799.5. In the US the S&P 500 and the Dow Jones Industrial Average swung between losses and gains on Wednesday after a strong private hiring report raised the odds of an interest rate hike next week, lifting bank stocks while dragging rate-sensitive sectors.


What this means for you:
Have you ever wondered what you'd do if one of your children was seriously unwell? Would you have to stop work to take care of them? You may like to consider taking out a Child Trauma Policy, which provides a lump sum payout if your child is diagnosed with a critical illness. These policies are very low cost, but they do provide an injection of funds at a time when medical costs can skyrocket, and one parent usually has to take on a carer role. Policies are available for children aged between 2 and 18, and at 18 they can be transferred into an adult trauma policy.

We've had International Women's Day this week and it's a good time to remember that women make great investors. Statistically, women tend to be more patient with their investments and are less likely to make rash decisions. So what are you waiting for ladies, get out there and make a start!

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.

Financial planning is not just for the wealthy. It's never too early to start out on the right path if you are a person ready to start building their wealth. The tools provided in the financial planning process can help individuals build long-term wealth and protect their family's future along the way, ensuring financial security later in life or in the case of disability (or worse). The truth is, we do not know what life might present us with, so preparation is key to long-term security.


Below is a list of the easiest ways to begin on the investment path and start to get your money to work for you and not against you!

1. Superannuation money - Top-up your own retirement savings above what your employer contributes by making salary sacrifice payments. You receive a tax deduction for any money deposited. While you're still accumulating, your deposits grow with only 15% tax being paid, then when you retire, a tax favourable income stream can be used to fund your lifestyle.

2. Share portfolio based on index funds – Give your savings an injection by adding a portion of them into the share market by making use of a low cost index fund, or better yet, a number of index funds. Then once you've established your investment, continue to save into it on a regular basis. The long term growth and dividend payments will far outpace the savings in a bank account.

3. Life and disability insurance – This is the backup plan for your family if it all goes unexpectedly wrong. Use your superannuation to fund the premiums where beneficial.

The Schuh Group Financial Planning Team are offering FREE "Get in the game" consultations for any client wanting to position themselves for continued growth and success. Contact Dominique Schuh direct at dominique@schuhgroup.com.au. to book your consultation today.

The ASX 200 index ignored the stronger overnight lead from Wall Street as it dropped 0.3% in early trade, due to weak wage and construction data. On the US market, investors are looking ahead to the Federal Reserve's minutes of its most recent meeting for clues on the timing of the next interest rate hike. The Australian dollar is up against the US, finishing at 76.79 US cents on Tuesday.


What this means for you:
Have you checked your nominated superannuation fund beneficiary recently? Your super fund assets don't automatically pass into your estate on death, as the beneficiary nomination will direct where those assets go. For industry funds, this nomination can sometimes lapse after 3 years, so it pays to revisit this. You also need to consider whether you'd like to leave the super fund assets to your children, as they may be forced to pay tax on the benefit amount. Nominating a spouse as your beneficiary will mean they receive the assets tax-free.

Overall the market has had a very strong 12 month period, which is great news for investors. For those who have been long-term investors, you're being rewarded for staying the course during both good and bad years.

The Week in Review

The Australian share market rallied on soaring Chinese debt extension and Commonwealth Bank's profit report and finished off high for the day. Last night the US S&P 500 index gained 0.4 per cent, but the S&P/ASX 200 index climbed to a 1.1 per cent gain, and finished up 53.9 points, or 0.94 per cent, at 5809.1 as bank stocks followed US financials higher. Wall Street's record-setting run entered its fifth day on Wednesday, as President Donald Trump repeated his promise of tax cuts and on upbeat economic data that increased the odds of a rate hike and lifted bank stocks.


What this means for you:
What a difference a year can make. This time last year investors suffered through one of the worst Januaries for markets on record, and now investors are enjoying a fantastic start to the current year. Some investors panicked 12 months ago and sold their shares, but for those who have stayed the course and not let their emotions get in the way, they've enjoyed double-digit returns over the 12 months. It just goes to show why it's so important not to make a short term decision on a long-term investment.

The heat wave power blackouts in parts of Australia have featured on the news recently, which reignites the issue of reliable energy. For individuals and businesses, there is a definite financial benefit to taking up solar for your power needs, provided you're going to stay in the same building for some years. Depending on the size of your solar installation, it will pay itself off in a number of years, meaning energy savings after that will fall straight to your bottom line. This may be worth considering for those who don't like their current utility bill.


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.

A bounce in resource stocks helped the Australian share market rally from the red as Chinese economic data held steady. The S&P/ASX 200 index dropped into the red in early trade after Wall Street rallied from a 0.5 per cent loss to finish slightly lower last night after US President Donald Trump backed away from some of his controversial immigration curbs. But the domestic index climbed to finish up 32.3 points, or 0.57 per cent, at 5653.2 as a weaker US dollar supported commodity prices.

What this means for you:
Ever wondered why we have a "home bias" in our portfolio asset allocations? Australian shares make up only around 2% of the global share market, but in our portfolios we hold a significantly higher portion than 2% in Aussie stock. The main reason is the added benefit of franking credits on many Australian shares. This is a credit given to investors to prevent the double taxation of Australian dividends, after the share companies have already paid tax before the dividend gets to the investor. If you're in pension phase in your super, these franking credits can increase your returns on your Australian shares by as much as 2% per year, which is one of the few "free kicks" you can take advantage of.

Why don't we put all the money in Australian shares you might ask? It's because the overall rate of return is also important, not just dividend income. Apart from the last 12 months, the Australian share market has been underwhelming over the last 5 years, with the international shares and property leading the charge for growth. Building a disciplined and diversified long term investment plan will always be the best strategy for investors.


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