Breast Cancer has maintained its deadly position as one of the top four estimated cancer deaths for 2017. It is predicted that an average of 48 people every day will be diagnosed with this horrible disease. With the average age of the first diagnosis is at 61 years*. Although 61 years is the average, there is commonly diagnosis at much earlier ages.

However, there is some good news at last! The survival rate for breast cancer has slowly been on the incline for the last few years. Recent statistics show the five-year relative survival rate has increased from 72% (between 1984-1988) to 90% (between 2009-2013)*. It is important to note that many people live a long and happy life beyond this as well.

I could go on and on about the statistics of getting breast cancer, treatment, survival rates etc. However, what you don’t see in any statistics or research is the impact a diagnosis will have on the loved ones connected to those with the deadly disease. As a Risk Insurance Adviser, I have witnessed firsthand the devastating toll it takes on loved ones not only emotionally, but also financially.

Thankfully, you can do something about it. By taking out trauma protection, you will receive a tax-free lump sum payout on the diagnosis and treatment of breast cancer. Clients who receive the benefit may wish to use the money for a number of things, some include:

• Paying for lumpy medical bills associated with treatment
• Providing a lump sum to reduce level of debt
• Living expenses so you and your spouse can take some time out of the workforce
• Capital available to take a holiday or not return to work immediately – even if you are physically able

The last thing you want to think about while going through this trying time is money. Here at The Investment Collective, we have a dedicated Risk Insurance team to help you through every aspect of obtaining, maintaining and claiming your life insurance.

October is Breast Cancer Awareness month I feel it’s imperative to remind everyone (yes, you too fellas!) the importance of self-examinations as early detection is important for full recovery. Everyone should be familiar with the size, shape, look and feel of their breasts and underarms so that if changes occur, you can be proactive and seek advice/treatment immediately.

You will commonly hear that someone ‘felt a lump’ which lead to their diagnosis. But, there are many other symptoms or warning signs to look out for, these include; irritation or dimpling of your breast skin, redness or flaky skin in your nipple area or breast, pulling in of your nipple or pain in your nipple area and many more. I would encourage everyone to become familiar with the early warning signs and to seek medical advice if they have any concerns.

Please note this is prepared as general advice. It has not taken into account your personal circumstances, your insurance needs or current coverage. If you would like to learn more about how the above advice can be customised to your personal situation, please contact one of our experienced and knowledgeable insurance advisers today.

Small businesses are vital to our economy and their sale can help fulfil their owners’ retirement dreams.  Since September 1999, there have been a number of Small Business Capital Gains Tax (CGT) Concessions available to allow business owners to cash in on years of hard work, blood, sweat and tears.  However, it is important that these concessions are correctly navigated; otherwise, there is a good chance that the “Taxman” will walk away with a big chunk of your hard work.

Business and Active Assets

The CGT provisions give a number of concessions to clients who sell a business or active business assets.  An active asset is:

• an asset the taxpayer owns and uses or holds ready for use in carrying on a business and has been active for the lessor of 7.5 years or 50 percent of its life;
• an intangible asset inherently connected with the business (e.g. goodwill); or
• an interest or shares in a resident company or trust where the market value of the underlying active asset is up to 80 percent of total assets for at least half of the ownership period of the interest/shares.

Eligibility

To be eligible for the concessions the following conditions must be met:

• you are an individual, partnership, company or trust;
• you are carrying on a business;
• you are a small business, defined as having an aggregate annual turnover of less than $2 million; and
• your net assets value plus the net asset value of the client’s associates must be less than $6 million (excluding home, personal use assets, life policies and superannuation.

The Concessions

15-year Exemption

If the business or active asset was owned continuously for 15 years, and you are over age 55 and retiring, you can sell the asset or business without being assessed for capital gains.  In our example above, the Smiths would be able to take home $270,000 each.

50% Active Asset Reduction

There is a 50 percent reduction on the capital gain from the sale of an active asset or business.  This is in addition to the 50 percent CGT discount if the asset has been held for 12 months or more.  If Mr and Mrs Smith implement this strategy they would incur a $43,875 tax bill and take home $496,125.

Retirement Exemption

A client can elect to have a capital gain of up to $500,000 from the sale of an active asset or business treated as a superannuation benefit payment.  If you are under 55, then this amount must be contributed into a superannuation fund and will add to the tax-free component. Once you reach the age of 60, all superannuation benefits are exempt from the tax, provided you meet the conditions of release.  This strategy can be applied after the CGT discount and would allow the Smiths to contribute $135,000 to each of their superannuation accounts.

50 percent Asset Reduction + Retirement Exemption

If you have multiple business assets that you wish to sell to fund your retirement, you may be at risk of exceeding the $500,000 limit.  To circumvent this limitation, it is possible to apply the 50 percent asset reduction as well as the Retirement Exemption.  This strategy allows the Smiths to contribute $67,500 to each of their superannuation accounts, providing breathing room for an additional contribution of $432,500 to each down the track.

Rollover

If you sell an active asset, you can defer all or part of the capital gain for two years.  You can defer this even longer if you utilise the proceeds to acquire a replacement asset, or if you spend money to improve an existing asset.  This concession can also be applied after the 50 percent asset reduction.

It is vital that your personal financial position is carefully analysed when considering these concessions, as the above is provided as general advice only and should not be taken to be personal advice. Even if your circumstances are similar one of the above examples, please speak contact us to a business consultant today.

The last thing you want is to see the proceeds of your hard work end up at the ATO when you had access to professionals that could have navigated you through this tricky process.  So if you are a small business owner with an eye on retirement, please come in to see one of our helpful Consultants or Financial Advisers to get a plan specifically tailored to your financial goals and objectives.

Confidentiality and respect for client information is paramount to good bookkeeping. Supporting small businesses in compliance and day-to-day administration can alleviate small business owners from the often tedious tasks of administration.

This allows them to focus on what their business is good at and achieving their business goals. Increasing productivity, creative endeavour, research and development are just some of what small businesses can do well.

Small businesses play a significant role in the Australian economy, accounting for almost half of employment in the private non-financial sector and over a third of production. Small businesses are an important source of innovation in the economy, yet 57% of businesses with four employees or less fail in the first four years, according to the Australian Bureau of Statistics.

While there is a multitude of reasons why their survival rate is low, juggling administration, as well as building productivity, can be a significant contributor to failure. According to a report published by the US National Small Business Association in 2016, administrative burden outpaces financial burden as the largest burden facing small businesses. Meeting regulatory requirements, and accounting for everyday expenditure is often not within the skill set of small business owners.

This is where outsourced bookkeeping can be invaluable. The Investment Collective’s bookkeepers provide support for a growing business on a time/needs basis.

Organisation, accuracy, reliability, sensitivity, the ability to deal with a range of people and assimilate information readily, are just a few prerequisites for a good bookkeeper.

As your small business grows, you will more acutely feel the need for professional advice and assistance. At The Investment Collective, we have business and investment expertise which we will draw on to provide your business with the assistance and advice you need in order to expand your business or encourage it to thrive.

We will do what we do best: support and assist your business to grow. We know what it is to be a small business, how to grow a small business and how to succeed in a difficult environment. If you would like to find out more about how our bookkeeping services could benefit you and your small to medium-sized business, and receive personal advice, contact us today.

Part of the ongoing investment process at The Investment Collective is the management of client portfolios. As a team, we are always tending to client portfolios and we see it as being similar to the process of maintaining a healthy garden. Investments without future prospects are weeded out, whilst new investments that we foresee as having a bright future are included. Existing investments are managed, trimming or adding to the investment depending on ensuing market valuations.

We employ a ‘catch all’ methodology to maintaining portfolios, and these portfolios are reviewed in a variety of ways. The most common being the six monthly review where our Portfolio Administration System (‘PAS’) alerts us of portfolios due for review after a six month period. We will also schedule a review when alerted to the fact that the portfolio has either a high cash balance or low cash balance. As we are striving to operate portfolios as efficiently as possible, any excess cash will be deployed if necessary and shortfalls in cash for future drawdowns will also need to be managed.

Lastly, we will occasionally action a change in the portfolio when we decide it is in our client’s best interest to exit from an investment. We initiated this recently whereby we recommended our clients withdraw their investments in the company. In this case, a sales recommendation is made and we then review the portfolio to make a subsequent recommendation for the cash that is raised. Given our high-quality benchmark criteria for inclusion into our Approved Products List, this event is generally quite infrequent.

Maintaining efficient portfolios is a vital cog in the investment process, similar to watering a garden. We are continually fine-tuning this process with the aim of extracting the maximum benefit from limited capital.

Please note the above article has been prepared for general purposes only. It may not be exactly how your investment portfolio is managed. It has not taken into account your personal information or investments. If you would like more about how might review and maintain your current or potential investments, please contact one of our skilled and friendly financial advisers today.

Your home loan is most likely your largest financial commitment over the period of your working life. Given the ever-increasing variety and complexity of products, it makes sense to review your mortgage every couple of years. Considering the suitability your mortgage regularly will ensure that your home loan keeps up to date with your changing needs and priorities.

Examining your home loan regularly is a sensible practice which could potentially save you a significant amount of money through reduced interest rates and loan fees, or by obtaining an improved loan product which offers the benefits of offset accounts and greater flexibility.

Refinancing your home loan to consolidate personal loans and credit card debt, may also free up your cash flow by accessing a lower interest rate. If you are looking to renovate your home, or borrowing to invest, you could also consider unlocking some of the equity in your home by refinancing.

If your existing home loan has not been reviewed for some time, your current interest rate may be much higher than the competitive rates offered by other providers. If your loan was previously at a fixed rate, it may have defaulted to a much higher variable rate on the expiry of the fixed rate period.

In the event that your financial situation has improved, or if your credit score has increased since you had applied for your home loan, you may be eligible for more favourable terms, or improved features with another loan.

Alternatively, you may have signed for your loan on an ‘introductory’ or ‘honeymoon’ rate. These reduced rates typically revert to a higher rate at the end of the discount period, and may include termination fees, should you decide to switch lenders.
As we have been in a record low-interest rate environment for some time, rates are more likely to increase over the longer term. We have noticed in recent months that some banks are increasing interest rates outside of the Reserve Bank of Australia’s cycles. If you are concerned about interest rate increases, you may wish to ‘lock in’ a fixed rate on all, or part of your home loan.

In addition to offset accounts, which will reduce your interest payments, many providers also offer the ability to make additional payments without any penalties. A handy feature to consider on your loan is the ability to be able to withdraw extra payments that you have made. A redraw facility may be beneficial if you need to access funds for one of life’s many surprises. Having a home loan with flexibility should your circumstances change, can provide the ability to access funds as required, or repay your loan much faster.

Before deciding on refinancing, consider the following:
• Are there any penalties or break costs when refinancing your home loan?
• What are the legal and administrative fees to discharge your current loan?
• What are the establishment fees and ongoing costs with a new loan?
• Should I apply for a variable rate, or fix all, or part of my loan?

At The Investment Collective, our mortgage broking team is able to compare home loan providers and determine the costs and benefits of reviewing your home loan. If you, or someone you know, would like to discuss lending needs, or review their current home loan, please do not hesitate to contact one of our lending specialists for a free, no obligation consultation.

Please note that the above information has been prepared as general advice only. It has not taken into account your personal financial situation or financing needs. In order to get tailored advice, specific to your circumstances and financial needs, please contact either office to set up an appointment.

Happy New Financial Year! To celebrate the new financial year, here’s a tip: Tax planning doesn’t start in June. If you want to increase the likelihood of a ‘good tax year’ this year, tax planning starts, well…now.

Here’s a few things to keep in mind:
1. Contribute as much as you can to your retirement nest-egg. In addition to the 9.5% your employer puts into superannuation, think about adding to this (up to a total of $25,000). Starting now, you probably won’t miss the money, and you could save tax.
2. Have a place to store your tax deductible receipts. There’s nothing that wastes your time more than hunting down all your receipts for the financial year in June!
3. Buy tax deductible assets earlier in the financial year. This is because the amount you can claim for these assets depends on how long you’ve held the assets. Buying a new computer on 29 June doesn’t give you much of a tax deduction.
4. Don’t buy or invest in anything just for the tax deduction. It’s the wrong reason.
5. Get a good accountant, and, of course, a good financial advisor (you know where to find a good one!)

Good luck!

Please note this advice is prepared as general advice only. It has not taken into account your personal financial objectives, current situation or future financial needs. If you would like more tips or specialised advice, or to hear about how the above advice could apply to you, please contact one of our skilled and friendly financial advisers today.

By now, we should all know the importance of life insurance and how it plays a vital part in our family’s lives. But what you may not know, is that it is not just a set and forget type of deal. Your need for insurance will drastically change throughout the course of your life.

The following events are ‘trigger events’ which will reveal the need to review different levels of personal cover:

• New (or pending) dependants, including children, aged parents or disabled children;
• Recently married, divorced or separated;
• Partner not working (responsible for children);
• New job, occupation or business situation, e.g. establishing a partnership or shareholding in a business;
• Redundancy or salary increase;
• Inheritance of a bequest;
• New, or increased debt e.g. purchase of an investment property or obtaining a business loan;
• Positive changes in your health, e.g. you may have quit smoking, lost weight or had a medical issue level out.

While it is vital to review the levels of cover, it is just as critical to review the product itself. Insurance companies often review and/or upgrade the benefits in their policies to provide superior products to their customers.  Some of these improvements may be attributed to advances in the medical field, for example, there may be changes in the way doctors diagnose a patient’s heart attack. Or the insurance companies added benefits to the policy, for example, 20 years ago, a typical trauma policy only insured for up to four major health events. Today, some contracts can provide benefits for upwards of 40-50 events, depending on the insurer.

You also want to ensure your policy is still competitively priced. Every year when the renewal letter shows up from the insurance company, no doubt we all wince at the increase in price. Sometimes we just bite the bullet and pay, other times we start to doubt the need of insurance and decide to cancel. Insurance companies know the strain of increasing premiums can have on families so they are starting to implement incentives which enable you to receive discounts. Some of these may be in the form of multi-policy discounts (for example, a husband and wife apply at the same time), multi-cover discounts (holding life, TPD, trauma and income protection), and health and wellness programs.

At The Investment Collective, we try to schedule annual reviews with our clients to ensure their risk protection strategy continues to meet their goals and objectives. If it’s been some time since your last review, or since your cover was put in place, please contact one of our specialised Risk Advisers.

The above advice has been provided as general advice only. It has not taken into account your personal insurance needs or current coverage. It has not considered your personal information in any regard. If you would like to learn more about how the above advice can be customised to your personal situation, please contact one of our experienced and knowledgeable insurance advisers today.

A power of attorney is a legal document that allows another person, the attorney, to act on your behalf to make financial decisions for you.  For example, an attorney may sell real estate, buy & sell shares or use money in your bank account to pay your medical bills.

It is crucial to make a power of attorney before you need it because once you have lost mental capacity you cannot make a power of attorney because, for it to be effective, you must be able to fully understand what you are signing.

Just picture this…

Your spouse suffers a stroke and is hospitalised.  The medicos inform you that he is suffering from memory loss and the prognosis is not good.  Some weeks later his condition worsens; he loses mental capacity and is transferred into full time care.

You live on a farm outside of town which you are now forced to sell to enable you to purchase a small unit in town to be close to your spouse and to also meet ongoing medical bills.

You make an appointment with a solicitor to affect the sale of the farm.  The solicitor tells you that as you and your husband own the farm in joint names, both of you need to sign the necessary documents.  You explain your husband’s situation to the solicitor, to which they reply; “that’s ok, we can exercise his Power of Attorney, so you can sign on his behalf”.

Your heart suddenly skips a beat as you realise that you and your husband never got around to getting that power of attorney organised after being prompted by your financial adviser every time you’ve seen them over the last half a dozen or so years.

In the above scenario, it is too late for the husband to get a power of attorney as he has lost mental capacity.  The only way to sell the farm now is to make an application for the appointment of a Guardian through the Guardianship Tribunal.  This process can take several months as the tribunal gathers all evidence, makes enquiries and holds a hearing in which a decision to appoint a Guardian is made.

All of this stress and running around, in a traumatic time of your life, could have easily been avoided by having an Enduring Power of Attorney in place.

An Enduring Power of Attorney provides you with the knowledge that your affairs will be managed by someone that you have chosen and can trust to act in your best interests.  An Enduring Power of Attorney can commence immediately or on a pre-determined date in the future or alternatively, upon you losing mental capacity due to: dementia, Alzheimer’s, an accident or illness.

You should appoint someone you trust absolutely and your attorney must also:

• Be over 18 years of age
• Have mental capacity
• Not be bankrupt, and
• Not be your health care provider or a paid carer

You should also consider appointing more than one person in case the first attorney appointed is unable to act for some reason.

So, get that power of attorney in place so you can save yourself the stress.

This above advice is provided as general advice and should not be interpreted as personal advice. If you would like to discuss the suitability of a power of attorney for yourself or someone you know, or to discuss how to/who to set up a power of attorney, don’t hesitate to contact our friendly staff today for a free initial consultation.

My interest in the Antarctic began in 1958 after I met the son of my father-in-law’s motor mechanic whilst having my old bomb serviced. Ron had only returned home the day before from a 12 month stint as a land surveyor. He told me that he had a wonderful and enjoyable time working down there. He stated that he was only home for a short while before he had to return to complete the project he had been involved in.

In 1978, when I was umpiring football with the Yarra Valley Mountain District Football League, our umpire’s advisor brought a friend to training one very cold night. When he was introduced to us we were informed that he had just returned to Melbourne from working down in Antarctica. We were all interested in the work he’d been involved with and what it was like to live there.

The following week, instead of training, this chap spoke to us about his stay down on the cold continent and also commented on our training attire. He told us that when one went out into the cold the most important pieces of attire was good footwear and a beanie.

During May 2015, I saw an advertisement in the Herald Sun newspaper for a seminar about trips to the Antarctic to be held at the Rialto Hotel, Collins Street, Melbourne. The session I went to, there were only three attendees but I found it very interesting and came away completely hooked.

Finally, I got myself organised to go to Antarctica on the 12th of February 2017.

We departed Tullamarine Qantas Domestic Terminal at 8:15 am in a Qantas 747 aircraft with a full plane. On arrival at Antarctica, our first communication was with Casey Station at 1100 hours and the first sighting of the ice was at 1310 hours. Then we flew over the continent for the next 6 hours, before our return home, arriving at Tullamarine at 9:00 pm.

During the day, everybody was very cooperative because we were all there to see as much as we could and have a wonderful experience. It is not easy for everybody to see out of small windows.

With respect to sitting near a window, one could book a window seat, but when we reached the half way mark of our time there, you were required to swap seats with another passenger who had booked a window seat.

Each time I looked out of the plane window, the beautiful scenery appeared to be changing all the time. We flew at a height of 10,000 feet above the ground.

When one reads facts about this continent, it’s larger than Europe and twice as big as Australia. I found it to be a fascinating place, something that I have never seen or experienced before in my travels.

This story was supplied by a The Investment Collective client for 2017 Financial Planning Week. 

What are the aged care options?

• Help at home

Subsidy is available from the government for home care services.   Your adviser will be able to provide you with further information about these services (they are not the subject of this article).

• Care through an aged care facility

Residential aged care provides care on a permanent basis or for a short stay known as respite.  There are different levels of care available and range from a fairly independent lifestyle through to 24 hour nursing care.

What are the costs of entering an aged care facility?

You must first be assessed by an Aged Care Assessment Team (ACAT) to identify your eligibility to receive care and which services you will need.

The costs of entering and living in an aged care facility include:

• Accommodation Contribution (Refundable Accommodation Deposit – “RAD”)
• Daily Accommodation Payment (“DAP”)
• Basic Daily Fee
• Means Tested Care Fee

How much will I need to pay?

The facility will charge you an accommodation contribution, or if your income and assets are below the prevailing threshold, the government will pay your accommodation costs.

If you have been assessed as having the financial means to support your own aged care, the accommodation contribution may be paid by RAD or by DAP or a combination of the two.  Interest charges may apply for any outstanding accommodation payment and residents must be left with at least a minimum amount of assets.  As an example, if your accommodation payment is $300,000 you may pay this:

• in full as by RAD; or
• by DAP; or
• a combination, say $150,000 by RAD and the remainder by DAP.

Every aged care resident will pay the same basic daily fee.  This is a fixed fee, indexed semi-annually for inflation.

The Means Tested Care fee applies only to residents whose assets exceed the asset threshold at the time and it is also paid at the maximum rate if the resident does not complete an annual Assets and Income Review with the Department of Human Services.

How can I get help to make my financial decision?

Contact an adviser at The Investment Collective to assist you in making your decision about aged care so that you have the best financial outcome.  Information is also available on the internet at https://www.myagedcare.gov.au/

Please note the information provided in this article is general in nature only. It has been prepared without taking into account your individual objectives, financial situation or needs. Before acting on anything in this article you should speak with your financial adviser to discuss whether it is appropriate to you in regard to your objectives, financial situation and current aged care needs. An adviser at The Investment Collective to assist you in making your decision about aged care so that you have the best financial outcome. Some of the details in this article may fluctuate from state to state and it is best to speak to an adviser about your specific circumstances before considering any of this information.