Download A penny saved is a penny earned

December 2015
News
Money Options Pty Ltd
AFSL 244575
544 Goodwood Road
PO Box 204, Daw Park SA 5041
Ph. (08) 8277-2233
[email protected]
www.moneyoptions.com.au
Office Update
This year has been another big year for
growth at Money Options.
We
completed our office renovations, added
a couple of new faces to our team,
launched our updated website and
continued to work on new services and
ways to better suit our growing client
base.
The office renovations, which
started this time last year, saw two new
meeting rooms added, a new reception,
a new form-signing area, along with an
open plan work area for the majority of
our team to work in. Please feel free to
pop in and have a look if you haven't
seen it yet - you are always welcome!
The new faces around the office are
Emily, our new Receptionist (see below),
and De Woolman, our new home loan
consultant, who is currently working part
-time. We continue with our Financial
Advising team - David Harrison (full time)
and Nick Habgood (part-time Mon-Wed).
Tom Surman will also be joining their
team in December 2015, whilst also
continuing his role as our Chartered
Accountant. Our Administration team
continues with Desiree and Wendy
heading up client services & compliance
and Prisca who handles the accounts
marketing side.
From Wednesday 23rd December (lunch
time onwards) our office will close and
re-open on Monday 4th January. During
the month of January some of our team
will be away at different times, however
we will endeavour to have someone here
to help with most queries should
anything urgent pop up.
Don’t forget to like us on Facebook to
stay up to date with the latest news here
at Money Options. https://
www.facebook.com/
moneyoptions.com.au/. Also check out
our new and improved website at
www.moneyoptions.com.au.
Prisca Harrison
Marketing/Accounts
[email protected]
New face at the front desk
In July this year we welcomed Emily
Rasmussen to the Money Options team as
our full-time Receptionist. Emily is new to
administration and the Financial Services
industry but has had 7 years’ experience in
hospitality and customer service. She has
already proven to be a friendly voice and
face to our customers who call or visit our
office. Emily is excited and ready to take
on this new chapter in her life and has
fitted in so well to our team. She is
responsible for client appointment
preparation as well as assisting with many
of the marketing projects. She enjoys
travelling back to her home town in the
South East to visit family and friends and
loves spending time at the beach, cooking,
sewing and other DIY projects.
In this issue
Pg. 1
Office update
Pg. 1
New face at the front desk
Pg. 2
David’s Market View
Pg. 3
Reducing Age Pension eligibility
Pg. 3
Is an SMSF right for you?
Pg. 4
Managing your mortgage
Pg. 4
Slow cooked butter chicken recipe
Pg. 4
The simple approach to feeling good
Website Launch
For more information about the services we
offer :

Financial Planning

Tax & Accounting
 Home loans
you can visit our newly refurbished website at
www.moneyoptions.com.au
You can also arrange an appointment with one
of our experienced consultants through our fast
and easy online booking service.
LIKE us on Facebook
Don’t forget to like us on Facebook to keep up
to date with all the latest news at Money Options. www.facebook.com/
moneyoptions.com.au/
A penny saved is
a penny earned
- Benjamin Franklin
David’s Market View
Money Options, for a majority of our clients
who invest with us, generally adopts a Low
Risk allocation or Growth allocation, investing
in a variety of Investment Managers and
funds, depending on the client’s individual
needs, goals, risk profile, income, assets and
expenses.
We choose the funds and
Investment Managers based on research, our
beliefs and discussions through our own
internal Investment Committee meetings
(held monthly). I am pleased to say our
super allocations have outperformed against
all the other super funds we measure
ourselves against, in both rising markets and
falling
markets
(see table below).
Advertisements by external Super Funds tend
to focus on fees as the be all and end all, and
we are highly conscious of the fee impact on
returns, but the first priority is to get results
and if we have to pay more for better results,
we will. Many investment and super funds
won’t because it conflicts with their “low
fee” marketing, however we would always
rather gloat a “high return” marketing
strategy.
Our Low Risk allocation
We have our Low Risk allocation in up to 5
different funds and investment managers at
the moment. A few months ago we chose to
replace a couple of funds with new ones of
which returns are very average, at around
2.5% over a year.
Nevertheless, that
compares to other provider’s returns, which
have also been very average. Interest rates
are near enough to zero around the world
and there is only one way for them to go
from there. In Australia the Cash rate is
about 2% and may go lower but that is all
talk, nobody really knows short term. We
are highly focused on not having exposure to
longer duration bonds in this sector. In
layman’s terms that means we are using
managers that are holding variable returning
assets - if rates go up, their returns will also
go up. If rates do go up and investors are
holding fixed rate investments, such as
medium duration term deposits or bonds
they will lose money. We are not
comfortable with that so will stay where we
are for the time being, rather than have any
risk of big negatives if interest rates go up.
Our Growth allocation
Australian Shares have been terrible and got
even worse over the last 3-6 months. We
are holding a 25% allocation in Australian
Shares with most of this in small
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companies. Small company fund returns
have been excellent the last couple of years
whereas the larger blue chip funds have been
terrible. We are glad we made this call
however have recently moved some of this
small company money into the larger blue
chips.
investments in such things as airports, toll
roads, shipping ports etc. The returns here
have been above 10% per annum the last
several years which is a little lower than
property trusts, but we are still happy with
the result and the lower volatility it has
provided.
Our Global Share allocation has made a
massive contribution to the return on a large
majority of our portfolios over the last 5
years with several investment options
delivering around 20% per annum over this
time. We still have a big allocation here with
55% of money going into global share
The last allocation we have at the moment is
a 10% position in a Futures fund. This is a
little too complex to explain in this article, so
if you would like more information I’d be
happy to explain to you. This fund has been
a tremendous inclusion, with the idea of the
fund, following trends. Importantly it is not a
share market fund, so it can produce
excellent results, regardless of share
markets, which is important in reducing the
bumps associated with short term, negative
movements. The returns from this fund has
been up about 29% (for the 12 months
ending Sep 2015) but importantly it has
produced many very good months when
share markets have had very bad
months. This is exactly what we wanted
from the inclusion of this fund and is why we
will stick with it for the time being.
with several investment
options delivering
around 20% per annum
funds. The largest allocations are still in
Platinum and Magellan, who are both super
quality managers, who have delivered
outstanding returns. The Asian funds were
going really well until the middle of the year
when the Chinese market went for a tumble,
but are still up quite a bit over the last few
years. Emerging markets returns haven’t
been good at all and now on many
measurements look the cheapest and
hopefully will provide some outstanding
numbers in the next 2-4 years. We have also
taken a small (5%) position in a Global
Resources fund. We are hoping to add some
good results to the portfolio over the next 35 years with the inclusion of exposure to this
resources sector.
With regard to Property Trusts, we moved
out a few years ago now and chose to use
global infrastructure instead, which includes
These allocations are not suitable for
everyone’s financial situation and it is
imperative you meet and discuss any
changes, with your Financial Adviser, prior to
making any investment or changes to your
portfolio. The returns above are estimates
and are no indication or guarantee of future
performance.
David Harrison
Director/Authorised
Representative
[email protected]
Performance Comparisons to 30/11/2015*
Investment Allocation
1 year
3 years
Money Options Growth Mix
10.2%
15.4% p.a.
Australian Super High Growth
9.7%
11.8% p.a.
Super SA Growth Fund
7.1%
11.5% p.a.
REST Core Strategy
6.0%
11.5% p.a.
*Performance figures based on actual returns for Money Options portfolio. Other fund returns based on
information on each product website. All returns are after fees as published. Actual returns can vary slightly
depending on timing of entry and ongoing contributions. This is for information only. Please seek advice before
making
Is an SMSF right for you?
Self-managed super funds (SMSF’s) are
becoming a popular alternative to the
traditional super funds for Australian’s to
manage their retirement savings. Whilst
there can be some significant advantages to
structuring your super in this way they are
not the best retirement savings vehicle for
everyone. It is extremely important to
carefully consider your personal needs and
circumstances before setting up a selfmanaged super fund. Below are a few of the
benefits of utilising an SMSF structure:
Control and Visibility
For most people superannuation is one of
their largest assets, therefore you want to
make sure that investment performance is
up to scratch. With an SMSF structure you
can decide exactly how you would like to
invest your super and can track it closely
throughout the year.
Investment Options
Self-managed super funds offer a wider
range of investment options than what the
traditional retail or industry funds offer. With
an SMSF you can not only invest in shares or
managed funds but also direct property,
artwork, collectibles or even your business
premises.
Tax Effectiveness
SMSF trustees are able to develop and
implement investment strategies aimed at
maximising the after-tax return of the fund.
Furthermore, as the members move towards
retirement, there a number of taxation
strategies available to reduce the amount of
tax payable.
Is an SMSF right for you?
The best people suited to SMSF’s are those
who are looking to take an active interest in
their super savings and feel comfortable
making their own investment decisions.
Whilst this does not mean you are
completely on your own in terms of making
decisions, trustees must have a good
understanding of the investment process and
their responsibilities as trustee of the fund.
Another key consideration is the cost of
running a fund. There is substantially more
administration costs to consider for running
a self-managed super/fund which include an
annual tax return, annual audit, ATO fees
and investment costs. With technological
advancements the compliance costs have
dropped dramatically but you will generally
need a minimum starting balance of about
$200,000 to ensure that your fund can grow
comfortably after taking into account these
costs.
Want to learn more?
If you’re looking to find out more about
SMSF’s and whether it might be appropriate
for you feel free to speak to our Chartered
Accountant Tom for a no obligation
consultation.
Tom Surman
Chartered Accountant
[email protected]
Government Reducing Age Pension Eligibility
Government changes to the assets test from
1 January 2017 will change Age Pension
eligibility. For some it will increase their Age
Pension entitlement, but for many others
they will receive a reduced pension and in
some cases lose pension eligibility
completely. While this seems a long way off,
planning ahead and considering strategies
that you may be able to use to decrease your
assessable assets could prove to be
invaluable in retaining some of your age
pension that may otherwise be lost.
The government refers to these changes as
‘rebalancing the assets test’ aiming to
increase entitlement to the Age Pension for
those with lower levels of assets and reduce
entitlement to those with higher levels of
assets.
Changes to the assets test
The assets test uses an upper and lower
threshold to determine whether you are
eligible to receive a full Age Pension, a part
Age Pension, or none at all. (see table
below). If the total value of your assets is:

Less than the lower threshold amount,
you may be eligible for the full Age Pension

Between the lower threshold and upper
threshold, you may be eligible for a part Age
Pension
Above the upper threshold amount, you
aren’t eligible for the Age Pension.
Ways to reduce your assessable assets
If you believe these changes may affect you,
Lower threshold
Upper threshold
As at
20 Sep 2015
From
1 Jan 2017
As at
20 Sep 2015
From
1 Jan 2017
Single homeowner
$205,500
$250,000
$783,500
$547,000
Single non-homeowner
$354,500
$450,000
$932,500
$747,000
Couple homeowner
$291,500
$375,000
$1,163,000
$823,000
Couple non-homeowner
$440,500
$575,000
$1,312,000
$1,023,000
there are strategies you may be able to use
to reduce the value of your assessable assets.
They include:
1.
Increase the value of your home.
2.
Gift money to your children or
grandchildren (up to $10,000 a year, to a
limit of $30,000 over 5 years).
3.
Pre-pay your funeral expenses or buy a
funeral bond of up to $12,250.
Purchase a long term annuity (6 years or
more) which is assessable under the assets
test, however Centrelink will apply a
deduction amount annually which will reduce
the assessable value from 6 months after
commencement. The deduction amount
represents the return of capital and is
calculated based on your account balance.
Speak to your Money Options adviser to
discuss whether the changes to the Age
Pension will affect you and review potential
strategies which may be suitable for your
personal situation.
Nick Habgood
Authorised Representative
[email protected]
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Control your mortgage, rather than let it control you!
A proactive approach to managing your mortgage can help steer you through a tough environment.
With
the
price
of
the
average
home seemingly beyond reach, most wouldbe home buyers feel like the odds are
stacked against them when it comes to
purchasing a home. Buying your first home or
investment property is still possible, all it
takes is a little time, mortgage know-how and
the commitment to managing your finances.
So what does this mean for you and your
mortgage? There are a range of different
mortgages now available from numerous
lenders. Switching products to better suit
your financial situation, could potentially
save thousands of dollars in interest
repayments and take years off the life of
your loan.
impacting on your ability to meet your
mortgage commitments, you may even
consider consolidating all your debts into one
easy monthly repayment..
Consolidating debts, such as credit cards or
personal loans, into your home loan can
mean paying an overall lower interest
rate, and also in turn help improve your cash
flow.
Cash
flow
is
an
important consideration when it comes to
your mortgage. While it can be a very
effective strategy, refinancing your home
loan is not the only option that’s available. A
number of simple tactics can help you make
significant changes to your financial
situation.
For example, you may want to switch to a
lower variable-rate mortgage with fewer
features, or lock into a fixed-rate mortgage
where you’ve got certainty in repayments
each month. Breaking the terms of your
current mortgage can be expensive however,
so you’ll need to check that you’ll come out
ahead when all costs are considered.
Moreover, if you have other debts that are
These include:


1 x Tbsp. Organic Coconut Oil
3-4 whole garlic cloves (crushed)
1 x diced onion
1 ¾ cup Coconut milk
¾ cup tomato paste
2 tsp. garam masala
1 tsp. curry powder
½ tsp. ground ginger
½ tsp. chilli powder (more if you
want it hotter)
sea salt & black pepper ground
1.
Heat coconut oil in a large saucepan at a
Remember, if you feel you’re struggling to
meet mortgage commitments it’s best to act
now, rather than let the problem spiral out of
control. To discuss your mortgage options
and to explore how you can better manage
speak with De today.
De Woolman
Lending Consultant
0410315264
[email protected]
The simple approach to
feeling good
Add onion and garlic, cook, stirring
Some ideas anyone can focus on to get that
“feel good” feeling in their life:
frequently for approximately 3 minutes
1.
Volunteer for a charity that means
something to you.
2.
Phone a family member or friend you
haven't spoken to in a while (phone not
text or email).
3.
Clean your desk, room or house– a real
spring clean.
4.
Exercise, meditate or pray (which ever is
important to you).
5.
Give something to someone in need.
6.
Smile and say hello to a stranger.
medium to high heat.
2.

Setting a budget: Work out your
expenses, fortnightly or monthly, and
factor in your mortgage repayments.
You might need to cut back on spending
in places to make sure your mortgage is
PALEO-FRIENDLY SLOW COOKED BUTTER







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or until the onions have become
translucent.
3.
Add coconut milk, tomato paste, garam
masala, curry powder, ginger powder,
chilli powder, stirring until well combined and the sauce has started to thicken. Season with salt and pepper.
4.
a
priority.
Keep
a
diary
of
your spending and stick to your budget.
Cutting your debt: Reduce the number
of credit cards you have (ideally down to
one) and their credit limits, and only use
them sparingly. Having a mortgage
means taking control of your spending.
Arranging a direct debit: Arrange
for your mortgage repayments to be
direct debited from your pay, so you
always make them on time.
Add chicken to the slow cooker, then
add the sauce and mix through the
chicken
5.
Cover and cook on low heat for 5 hours.
7.
Choose the healthy meal option.
6.
Serve with coriander and, if you want to
8.
Look through old photos and remind
yourself of all the great memories you
have made.
9.
Do something you have always wanted to
try.
go paleo serve with cauliflower rice
(blitzed cauliflower), or if you and your
kids prefer, stick with the usual rice accompaniment.
10. Tell some you love them!
The information contained in this newsletter is of a general nature only and does not take into account your particular objectives, financial situation or needs. Accordingly, the information given should not be used, relied upon of
treated as a substitute for specific financial advice. While all care has been taken in the preparation of this material, no warranty or guarantee is given in respect of the information provided. The articles have been written by the
Director, Staff and Contractor of Money Options Pty Ltd and are views and opinions only by them individually. Money Options Pty Ltd or the AFSL License held by Money Options Pty Ltd is not to be liable on any ground whatsoever for the decisions or actions taken as a result of you acting upon such information. Results of any funds or markets is no indication of future results and there is absolutely no guarantee for returns in the future.
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