What’s the best use of your Super?

What’s the best use of your Super?

Yes that is a question that depends on your age & often on the size of your debts?

Certainly at our age most but certainly not all have insufficient super. Remember if you can earn 5% & you want a comfortable lifestyle then $1,000,000 will provide an income of 5%.

Who has that?

If that capital amount is within super then currently it will be taxx free. But for how long as it is suggested that Centrelink or the government will factor the income under deeming rules from January 2015.

I.e. the income & asset tests for your portfolio will count as they would if they are outside super if you qualify for government pension.

1.  This is one reason why we suggested to ‘David’ on Saturday to maximise his super. David has a Qsuper balance that over the years has performed @ 4.6%p.a.  compound. He is being charged a higher interest rate on his mortgage. At 55 he doesn’t have enough time or spare income to pay down his Debt before he may have to retire.

Remember the biggest fee on your super is in fact the government 15% taxx on the earnings of your super fund.

 Doesn’t it make sense to you that if you could minimise that Government fee to zero that you would.

David as we all do who live in Australia also has the challenge of replacing his car. Yes a depreciating ‘asset’ that will be ½ as much in 3 years time. 

How does he fund that?

David does Not have any spare cash to purchase a car.

Does he refinance the house or does he use an expensive personal loan?

Yes maybe another reason to tap your super if you qualify.

Of course as we all know there are plenty of restrictions on doing so.

2.  We had Henry & Ann here recently who due to past unemployment & a daughter with family have scary debts.  At the age of 62 then they may have to work for ever. 

How many are like them?

The finances may get to them as the debt mountain is scary & very similar to others in our neighbourhood. No light at the end of the tunnel.

Hence our suggestion for Taxx Free income will certainly help. It has to be better that the compound p.a.  that their super has achieved.

3.  James who has followed up on a roof inspection for us said today  ‘ his company doesn’t do band aid solutions’.

As we do & as we should  we asked James ‘how many children does he have? He has three aged 4, 6, & 11.

How much life Insurance do you have?

Don’t Know.

We suggest 1.5 million if you have a mortgage.

How does James fund that need?

If James’s financial situation is like most then he won’t be able to afford a $. 

Yes there are 2 simple solutions.

James suggested that  ‘he has a personal super & he might consider a SMSF’.

We commented that ‘we don’t as we don’t want to be a trustee at our age or 70+. Our platforms have all the 300 shares & fund options we need. Also the accountant only wants another set of fees’.

We liked James’s answer &  ‘we don’t do Band aid solutions either’.

4.  Brian who is a construction foreman has just asked us for a quote on insurance. Just like James we need to do more than a band aid.  Builders need architects & quotes need some parameters so they make sense. Brian can go direct & pay 40% more if he wishes. Good luck at claim time.

5.  Thanx Geoff for your referral just now to help your clients who needed more than a bank option. We suspect we have another option for them.  Their ages suggest so & we have helped Paul recently who had the same bank experience.

We intended since the 1^st cricket test to ask & comment on ‘Should Stuart have walked’  as it was one of the talking points of the 1^st test.

Stuart didn’t as either he has ‘broad’ shoulders or he is a team man or he is constricted & restricted to the rules & regulations & law.

The  law for us now for us has a ‘best interest’  section. 

We didn’t & don’t need that law as it has always been our philosophy to do for you what we would do for ourselves if we were in your position.

Law in our opinion is the escape clause that allows personal integrity a fall back. This didn’t work @ Nuremberg. 

We would have walked as we all have to live with our decisions. Our name is important to us.

We understand The Don didn’t  & understand he did Not have too many friends  in Adelaide. Maybe his average would only have been average.

You are welcome to call us on 07 3848 1088 or email us or visit our websites. 

Today is the time to remove the band aid & financially progress.  Let compound interest & good advice help you & not restrict you.

John McAuliffe

Andy & Ivan & Robbie & Warren & Darren

Yes, some names from the weekends sport’s results.

Andy wins Wimbledon at which he had been runner up previously. To use rugby’s weekend’s phrase as it is the ‘pinnacle of our sport’ then Andy & his mum had two years ago searched for a coach.

They ‘encouraged’ Ivan Lendl out of hibernation to coach & help them. If you recall Ivan won everything some 20 years ago but not Wimbledon. Hence they both had  a common goal which they achieved last night.  Andy would have been unlikely to achieve it certainly by himself & maybe with any other coach. Well done Andy.

‘Lions ,lions, Lions’ were all in Sydney on Saturday & yes they roared & at the end ‘grinned’.  Let’s just say the Wallabies ‘dropped the ball’ & they never recovered’.  Although we could all go through an analysis the easy answer is ‘Robbie it is now time to pack the bags’. Robbie the coach did take the Wallabies to 2^nd on the ladder but 2^nd isn’t good enough & as he himself says ‘it is an industry’.

Of course on the other hand Warren the coach of the Lions is now a hero. He did make some tuff calls in the last selection & ‘Warrenball’ delivered.

So it is all up to Darren to work with his captain Michael to win the Ashes. We read ‘THE uncertainty swirling around Australia's XI two days from the first Test is matched by the mixed messages about who is setting the batting order.’ Cricket was always political & still appears to be so.

Darren , Australia needs you. However your nickname isn’t encouraging.

We observe that to reach the ‘pinnacle of our sport’ the constant in all this change is a coach.

 A 3^rd party who is not obscured by ‘the fog of war’. Who is far enough away & experienced & qualified  to offer in most cases the big picture when all are to close to see clearly.

 To use another word we shared with Adrian ‘inertia’ needs to be overcome.

Let’s also note that the coach also has a staff to help him help his team or player.

 On Saturday before all this we saw two who had put their hands up for some financial tune up.

1.       ‘Jill’ who was introduced to us by a very happy client wanted to know where to go next so as she could have more capital for retirement & yet still be able to obtain government benefits. Her House is  debt free & her four children are off her hands. She is placing the maximum into super.

What does she need to do? We await the results of her ‘financial X-ray’ before we can provide any advice. Do we add to her super when government legislation is always a risk?

2.       We had called ‘Ann & Henry’ who last year wanted ‘a cheaper insurance.’ As we only provided what they wanted  we had not been provided with the full picture of their challenges. Hence when we asked on Friday if they ‘would like taxx free income ‘then yes. They were here on Saturday @ 2pm.  We found out why later in the conversation. Ann had told us a year ago that buying ‘an investment property’ was ‘the worst decision’ she had made. The negative cashflow was killing them with horrendous debts 40K on credit cards. No wonder Henry  recently took his first days off with illness. The taxx free income we will access for them will be a start to some progress.

 Again we now need all details before we detail our advice.

 We had a call from an operator in mining in WA. He is earning money & does he buy ‘an investment property’ ? We will quote Ann & suggested to him 2 of our parameters for doing so. There are other options to build wealth & reduce government waste.

 

There are a few hundred on our mailing lists who like Ann & Henry have wanted cheaper insurance as that is all they think or will admit to needing.

 Cheaper insurance suggests to us that like Ann & Henry their cashflow is tight or negative. Hence there is a need to overcome your inertia & make the effort to call or reply.

 We made the effort to call Ann & Henry because at his age we saw a possibility. Henry had actually heard from work colleagues but how do you do it? The canvasser for roofing who knocked today here just now  may well have helped his employer.

 As you expect us to advise you to do what we would do if we were in your financial position then why not overcome your inertia & call us on 3848 1088 or email us or visit our websites.

 Lets also congratulate Marion on her Wimbledon win. Dad was her first coach.

  

John McAuliffe