It brightened my day

We offered our card to a courier recently & he returned it.

Good luck was our immediate response.

We were shocked & said to him that he was the first to do so in 28 years in this business.

Why? 

Because you can only rely on yourself.

That is very true & we agree with you but what happens when you stop?

Yes we all stop earning an income sometime & then how do you meet your wants & needs.

It might be a fatal accident as our client aged 28  had 3 weeks ago.

It might be retrenchment notices from your work as is happening  to Lee’s * father & to many when government cut payrolls as their incomes don’t meet their promises. 

It might be retrenchment from marriage as happens in 40% of cases.

It might be a disability from a work accident. In fact we heard from Lee* & Richard* that many of their friends had bought their first house by disability claims. We wonder how much ‘the crows on a wire’ skim from such a rort.

When we discussed Richard’s work disability cover through his industry super his comment was ‘it’s nothing, it’s a joke’.

But there is more as the exclusions & when you don’t have cover takes one half a page & you have to spend quite some time on the website to find these exclusions. If you know where to look.

e.g.  Your account falls below $1,000 and you are no longer employed by a BUSSQ employer, or

         You are no longer a member of BUSSQ, or 

It simply might stop because you are tired of working. You might be tired of government regulations, customers who are always right or you have other more pressing interests.

Whatever.

Where do the funds come from?

Governments are broke & we read today that the senate games have added an extra 8 billion to the budget blowout.

Can you rely on family & friends or charities?

You know the answer to that. 

So it has to come down to what you have saved?

If you save it in term deposits then term deposit  rates have dropped from 5% to 3.6%

Is that a 28% Fall?

We had a newsletter from a NZL share broker last week.

Lets note a key theme in it.

 term deposits are NZ’s most popular investment. What many investors are currently unaware of is that new rules introduced by Australian regulators make term deposits far more difficult to break. These changes include making investors wait over 30 days before funds are released and also increasing break penalties that apply to deposits (rabobank break fees can be as much as 50% of accrued interest).

And

Investors in banking assets whether it be in shares, bonds or term deposits need to be aware the that treatment of the these assets in the event of a loss, has changed significantly and these changes apply to not only new issues but ones currently in circulation, including term deposits.

Haircut was mentioned as happens elsewhere.

If you save for your retirement in a moderately conservative portfolio then its value over a long time historically at least means you would end up living on much less than if you had ‘taken the risk’ in a more growth portfolio. There is plenty of historical research demonstrating this.

However we have to provide Richard with a moderately conservative portfolio because otherwise the heavies will be onto us as the advisor. Richard has come to us for advice but we are restricted by the heavies. 

Who does Richard blame when he retires in 39 Years?

As Vanguard says in their newsletter today 

‘the research reveals that a great deal of value can be added to a client's portfolio through services like strategy, asset allocation and behavioural coaching of clients.’

We just now read a Christmas card that brightens our day & refutes the courier.

Hello, I  have been your postie for the last 3 years. I would like to thank you for the times you came out and said hello. It brightened my day. I have now moved and transferred. Wishing you a merry Christmas and a prosperous New Year.

Cheers

Good luck Rewiina & yes you have brightened our day.

What goes around comes around.

We believe that we can generate significant financial certainty for you throughout our relationship & importantly add substantial value to ensuring you achieve all that is important & valuable to you as you have articulated to us.’

If we were to sit down in three years time & looked back what do we need to do today so that you are financially & personally better off & happier.

As others do call us on 07 3848 1088 or email or visit our website & action those new resolutions & goals.

John McAuliffe

The phone call you don’t want to make

Yes we had the call at 8.30pm last night. It is the call an adviser doesn’t want to hear.

My son has been killed & you do his insurance.

We are in shock & just want to say nothing as anything is a platitude.

We are very sorry.

It happens to the wrong people.

Our prayers & sympathy.

You don’t deserve this has you have worked so hard.

Then we ask ourselves these questions

Who does he have his insurance with?

Who is his beneficiary?

Who do we contact & what is the process?

How much insurance does he have & is it enough?

What did we advise him to take?

 We don’t ask & no one ever does Now

How much was the premium ?

What did we charge?

What is the ongoing service fee for?

Let me think about it.

And all those other procrastination excuses for an opt out of the real world

This event affects everyone, parents, girl friend, work colleagues, customers, suppliers & all his friends.

May he LMC rest in Peace 

He worked very hard, he was ambitious, he cared for many years his girlfriend who is estranged  from her family  & his father was passing the business that he had built up to him.

Unfortunately this is not the first claim that we have had. 

We recall our first claim @ Easter 1986 when ADR was killed by a road train. 

We had advised cover six week earlier & he had to ask his wife who was a solicitor. 

We still recall to this day she quivering in shock at the funeral.  

No  she says .

 Hence we always wonder how she has survived. 

Insurance certainly doesn’t help the grief but   it helps all those left behind .

His cover is with TAL and TAL paid $885 million in claims in the 12 months to 31 March 2014, representing a 38% upsurge on the previous period.

and

For the first time in its history, the Australian life insurance industry has paid out more than $5 billion in claims in a single year.

As nearly all on our list has contacted us for cover & procrastinated then today is the time to call us again.

Is it our job to call you?  How many times should we?

After the PUP’s kitten’s petulant decision this week then maybe there won’t be an adviser left for you to call.

As others do call us today on   07 3848 1088 or email us or visit our websites.

We believe that we can generate significant financial certainty for you throughout our relationship & importantly add substantial value to ensuring you achieve all that is important & valuable to you as you have articulated to us.’

If we were to sit down in three years time & looked back what do we need to do today so that you are financially & personally better off & happier.

John McAuliffe

ADVANTAGES for ‘Belfast*’ asking our super advice

• ‌Below is a comparison of your current and proposed positions which illustrates the changes to your superannuation structure and the cashflow effect that this will have.

Belfast*	Current	Proposed
Pension Income		$  19,957.00
Salary Sacrifice Contributions	$                  -	$  28,255.00
Income Tax (Personal)	$      8,561.00	$        263.00
Contributions Tax (Super)	$         518.00	$     4,756.00
Total Tax	$      9,079.00	$     5,019.00
Take Home Pay	$   42,868.00	$  42,868.00

• Establishing a Transition to Retirement Income Stream will provide you with additional income via a pension to help you make additional salary sacrifice contributions to superannuation which will in turn reduce your personal taxation position.
• Implementing this strategy will reduce your tax payable position by $4,060.
• Your take home income level after our recommendations will remain the same as your current position.
• Your superannuation will be moved into a tax-free environment.  Based on current legislation, earnings generated by your underlying investments whilst in the accumulation phase of superannuation are taxed at 15% whereas in the pension environment, earnings are 100% tax-free.
• By moving funds from superannuation (where earnings are taxed at 15%) into a pension, this effectively prevents tax from eroding your income returns.
• Rebooting your pension annually will ensure that the bulk of your superannuation monies remain consolidated in a tax advantaged environment and invested as per your risk profile.
• You are currently able to contribute up to $35,000 per annum to superannuation via Concessional contributions. 
• Salary Sacrifice contributions are tax deductible.
• All pension payments will be tax-free.
• You are able to alter your income level (but must remain above the minimum) at any time.

·         Investment earnings on your capital within the Account Based Pension environment are completely tax-free.

·         ‌There is no capital gains tax implications for any capital gain that you realise while invested within the Account Based Pension environment.

·         ‌The capital invested in the account based pension can be accessed at any time by making lump sum withdrawals tax free.

·         Account Based Pensions are “Centrelink friendly” investments, as a significant portion of the income you receive will be exempt from Centrelink’s Income Test.

·         ‌Your capital is not lost on death.  The balance can be paid to your dependants, or paid in accordance with your Will or estate.

·         ‌If you have nominated a reversionary pensioner on the account (e.g. a spouse), in the event that you pass away, the reversionary pensioner may choose to continue to receive regular pension payments, or commute the remaining capital to a lump sum.

DISADVANTAGES

 Yes there are a couple which are fully explained  but we won’t include them here as our advice document for Belfast* is 21 pages.

We also provided this disclaimer

In addition to the above, we need to inform you that the provider of the advice can outline general taxation implications of any strategic information. However,

1. the provider of the advice is not a registered tax (financial) adviser under the Tax Agent Services Act 2009; and
2. if the receiver of the advice intends to rely on the advice to satisfy liabilities or obligations or claim entitlements that arise, or could arise, under a taxation law, the receiver should request advice from a registered tax agent or a registered tax (financial) adviser.

We could have added this but Belfast* who we have advised for 13 years knows this.

‘Good Morning John,

I refer to our conversation yesterday.

It gives me great pleasure to advise that your Application for the Certified Financial Strategist (CFS) certification has been successful……’

As others do call us on

07 3848 1088 or email us or visit our websites.

We believe that we can generate significant financial certainty for you throughout our relationship & importantly add substantial value to ensuring you achieve all that is important & valuable to you as you have articulated to us.’
If we were to sit down in three years time & looked back what do we need to do today so that you are financially & personally better off & happier.


John McAuliffe