The financial year has finished. September is commonly the month super fund statements will start arriving in your letterbox, and like many working Australians, you might be getting more than one.

Generally, superannuation is the second largest asset outside of the family home.

Your superannuation, no matter how big or small, is an investment and designed to fund your golden years. Do you spend the time reading through and understanding your annual superannuation statement?

The complexity of superannuation makes reading your statement confusing and stressful. Thus, ignoring and discarding the statement always seems easier.

Understanding your statement should be easy and here is what to look for:

Performance

Firstly, look at your account balance and the historical movement. The investment return is expressed as a percentage and gives the return on each of your investment options over a stated period, generally 1, 3 and 5 years.

Fees

The statement will list administrative and investment fees. The government also taxes employers’ a compulsory 9.5% (before tax) super contributions and earnings by 15%. Reviewing the total amount of fees you have paid will allow you to compare between different superannuation funds.

Contributions

Your superannuation statement will include a transaction history over the past 12 months, detailing contributions from your employers’ compulsory super guarantee. Make sure you are receiving what you are entitled to receive. If you are salary sacrificing or making co-contributions in addition of the super guarantee, check the accuracy of the deposits to your salary sacrifice agreement.

Insurance

Superannuation includes insurance cover, typically life insurance, total and permanent disability and income protection. The standard level of cover might not be adequate for your needs. Please talk to our insurance specialists to review the level of cover that is more suitable.

Beneficiary

Did you know that your superannuation falls outside of your will? For peace of mind, include in your super fund clear instructions as to whom you wish to inherit your superannuation. This can easily be achieved by completing a valid binding nomination, which lasts three years.

Familiarising yourselves with superannuation now, and creating a plan, could help you live a more comfortable and joyful retirement.

This advice is intended as general advice only, and is not meant to be interpreted as personal advice. It was prepared without taking into account your personal circumstances, objectives or personal situation. Please consider the appropriateness of the advice in light of your own circumstances. Should you wish to discuss further, to see if any of it might apply to you, contact us to speak to one of our friendly advisers today.

As a financial adviser for The Investment Collective, I need to know a lot of information about a client before being in a position to make appropriate recommendations. One of the key pieces of information I need to know is what cash inflows (or income), and what cash outflows (or expenses) they have.

What’s interesting is that pretty much everyone knows what their income is. They can easily identify their fortnightly or monthly income from their bank statements. However, a surprising number of people can only guess at their expenditures.

This information is fundamental to any recommendation, be it debt reduction or wealth accumulation.

For example, say you have $60,000 of income per year (after tax). Say, you make an educated ‘guess’ that your expenditures are about $48,000 per year. On paper at least, that would suggest that there is a cash flow surplus of $12,000 per year that can be ‘captured’ and applied to debt reduction or investment. However, what if actual expenditures are not $48,000 per year but more like $60,000 per year? You can see the problem here.

In the planning process, we need to do better than ‘guess’ at expenditures. We need to be pretty confident that cash inflow, as well as the cash outflow have been ‘road-tested’ and are reasonably close to reality.

How do you best get a handle on the amount of your expenditures? Well, there are plenty of online budget programs available. If you don’t feel the need to get down to that level of detail, a simple review of your credit card and bank account statements will give you a good sense of your cash outflows. Use a reasonable period, perhaps the last 12 months, and simply tally up all the cash outflows. Remember, in the planning process, cash flow is king!

If you would like to know more about what The Investment Collective can do to help you with your finances, contact one of our friendly advisers today.

Benjamin Franklin, one of the Founding Fathers of the United States, has been attributed as saying; “If you fail to plan, you are planning to fail!”

Whilst foresight is blind and the best-laid plans often go awry, it makes a lot of sense to have a plan, or at least some idea or intention on what you are going to do, or where you want to be in the future, and how you are going to get there.

An ‘Investment Plan’ lays down the pathway or strategy/ies for your finances to provide you with the greatest potential for getting you to your desired destination over the short, medium and long-term.

Before the plan can be implemented, however, you need to:

• Understand your current finances: establish where and how much of your money comes from, and where it goes, thereby leaving you with an idea of what surplus cash you have at your disposal. You may also want to establish what you own and what you owe.
• Develop your objectives and goals: what do you hope to achieve over the next 1-3 years, 4-6 years and beyond that? This allows a strategy to be developed, that if it plays out as planned, gives you the greatest prospect of being where you want to be at the end of the short, medium and long-term timeframes.
• Understand the relationship between ‘risk vs return’: the two are directly correlated in that the lower the risk, the lower the potential return; and conversely, the greater the risk, the greater the potential return. It is crucial you understand this concept and that you are aware of your level of tolerance to risk, because this must align with your objectives and goals.  For instance, if you have no tolerance to risk, but have a high growth return objective on your investment portfolio, there is a mismatch in the ‘risk vs relationship’ which will need to be addressed.  You will need to either: trim your return expectations or take on more risk in order to achieve your desired objective.

Once the above concepts have been grasped and documented in writing, you have started your ‘investment plan’.

The next step in the process is developing the strategy/ies to be implemented over the respective time frames.  This will be driven by the goals you want to achieve for each timeframe.

The above advice is provided as general advice and is not intended to be taken as personal advice. It has not taken into account your personal circumstances, objectives, financial situation or needs. You should therefore discuss with your financial adviser before implementing them to your current financial position. If you would like to discuss options and get more personal advice that is tailored to your current financial situation, please contact us and make an appointment with an adviser at The Investment Collective today.

With the increasing popularity of DIY home improvements and gardening makeovers, there has also been a surge in the number of injuries due to falls from ladders, misuse of equipment and inexperience with power tools.

Long weekends and holiday periods see a rise in accidents as people seize the opportunity to complete that project that has been put aside due to other priorities.  Hospitals and medical clinics experience an increased number of emergency visits and admissions due to serious injuries from incorrect handling of machinery and lack of proper safety precautions.

According to data collected in 2013 by the Monash University Accident Research Centre, falls from ladders whilst doing roof repairs, cleaning gutters and pruning trees, accounted for most around-the-home injuries.  Head, neck, eye and limb damage caused by power tools also represented a large proportion of DIY related injuries.

The statistics show that the most common machinery related injuries were caused by chainsaws, circular saws, lawn mowers, nail guns and grinders.

Contributing factors for the accidents were removing safety measures, disregarding safety instructions, lack of protective equipment and consumption of alcohol.

Due to the popularity of TV shows like House Rules, The Block and Better Homes and Gardens, along with the widespread use of Google and YouTube tutorials, people are often more likely to try to do it themselves, whereas previously we’d get a tradesperson to do the job.

DIY has become more commonplace as people have seen it done on TV, and decide, “I can do that!”  Many will attempt to complete projects around the home to try to save money.  It can often be difficult to find a professional to do the job who is not booked out, on holidays, or can do the job cheaply.

Access to cheap off-the-shelf power tools and other equipment, without proper training, equipment or sufficient information, can also prove hazardous.

Statistics:

Up to 75% – of DIY injuries occur around the home while undertaking maintenance, gardening or vehicle repairs.

Top 3 – DIY activities that result in injury are grinding, lawn mowing and ladder use.

Homegrown – Evidence suggests that home injuries result in more lost days from work than workplace injuries.

5:1 – The ratio of men more likely to be injured undertaking DIY tasks than women. Adults aged 25-34 are in the highest risk group. Women are most often injured in gardening activities. Men are most often injured in non-gardening activities such as grinding, welding and motor vehicle maintenance.

Just remember, sometimes more is lost by inaction, rather than action.  Plan for the future today so you don’t regret your inaction tomorrow. Contact The Investment Collective to learn more about planning for your future.

Human beings, generally speaking, are creatures of habit. We like, and gravitate towards, things that we know (or think we know), and feel comfortable with. No surprise then that we can observe this in all sorts of areas.

Yale Hirsch, an American stock market analyst, observed this in the share market.  In 1968 he published the inaugural ‘Stock Trader’s Almanac & Record’ in which he noted many stock market patterns and cycles, including one that he observed which seemed to take place around Christmas time.

Specifically, he noted that in the days between Christmas and New Year the US share market seemed to rise more often than it fell. In last year’s publication, it was noted that the US share market rose 34 of the last 45 years by an average of 1.4%. Stretching back over 120 years, there was a rise in the market in 77% of years for an average rise of 1.7%. The popular press, always on the lookout for a ‘feel good’ story, has attributed what it dubbed the ‘Santa Claus Rally’, to pretty much any increase in the share market starting from late November.

Why is it so? Well, you could probably take your pick of reasons, including fund managers ‘window dressing’ their investment performance before the end of the year by bidding up shares or simply the reflection of a positive mood leading up to the festive season.

So, do we here at Capricorn Investment Partners and the Pentad Group consider the ‘Santa Claus Rally’ when we review your investment portfolio? No, we do not. We consider a wide range of factors, including the quality of a company’s revenue, the dividends it pays and the competency and transparency of its management. If anything the ‘Santa Claus’ rally, while it exists, only underscores the notion that the market is comprised of human beings, who generally speaking, are creatures of habit.

There’s a commonly held belief in the real estate industry that spring is the best time of the year for selling a home. Although the season doesn’t officially start until September 1, now would be the time to start planning to make sure your property stands out from the rest.

Every aspect of the season can work in a seller’s favour. With the sun shining, the flowers in bloom, this not only makes your home look its best, but it also encourages buyers to get out and attend open inspections. It is important to remember that other sellers will also benefit from these conditions. Selling your home in spring means you’ll be faced with a higher degree of local competition than you would during the winter months. If you’re thinking of selling your home this spring, a good local real estate agent can help you increase the sale price.

To help make your property stand out from the competition, you’ll need to put in a bit of extra effort. One of the first areas to address is your property’s exterior appearance, because this is the first thing that buyers will see. You will want to put some effort into improving your kerb appeal. Take good care of your lawn by tidying your yard with a lawnmower, fixing dead or bald patches in the grass with a bit of fertiliser. Pull weeds and plant new flowers to add vibrant touches of colour to the garden. Flowers like daffodils and tulips are a good choice, because yellow is associated with feelings of optimism and happiness.

At the same time, be sure that the street view of your home is clear for viewers. Clear away any large bushes or trees that are in the way of a buyer’s line of vision by trimming stray branches. You may want to hire a professional gardener who has experience pruning trees for larger jobs, because this can be dangerous to do on your own.

Maximising the External Appeal

Although it is easy to overlook exterior areas like the outdoor nooks and crannies of the property, buyers will look everywhere. They can trek a great deal of muck throughout the property in winter, so you’ll need to give the full exterior of the home a good spring clean to make the best first impression. If you neglect these areas of the house, buyers may assume that you have neglected others.

Maximising the Interior Appeal

With the outdoor area of your home looking fresh and well-maintained, you can turn your attention to the interior of the home. Make the most of the spring sunlight by ensuring that it bounces off of clean, polished surfaces. By polishing your chrome fittings, floors, mirrors, glass, and door knobs, the light will really make these surfaces dazzle as it streams in through the windows during inspections. This will make the house look immaculate and create a great impression on buyers. Otherwise, the light will illuminate problem areas like dusty corners instead.

It’s a good idea to capitalize on the sunlight by pulling back all of your drapes and curtains, let the light in and bathe your home in a warm glow. You can also open up the windows to let the fresh air in and get rid of any residual stuffiness from winter. Air fresheners can bother buyers with allergies, so fresh air is preferable. To further benefit from spring’s effect, position vases of freshly-cut flowers throughout the home. This will help appeal to a buyer’s senses with the combination of bright colours and delicate fragrance.

Increase Buyer Interest with Colour

In line with appealing to the senses, use colour when selling your house. Colour can be an effective tool to influence a buyer’s mood. Bright, light, cheerful colours can create an uplifting atmosphere. Replace old bath mats, linens, throws, and pillows and replace them in complementary colours that fit the spring theme. A fresh coat of light, pale paint can also bring out the best in your home by making spaces seem larger. The overall effect could lead to a quicker offer from buyers.

No matter when you choose to sell your home, it’s important to be willing to adapt to the season and circumstances. Spring provides an abundance of advantages to sellers, helping you appeal to a buyer’s wish to make a fresh start as well.

These tips may be for selling your home, but our mortgage broking team can also help you with the purchase of a new home. Whether it be refinancing or getting a mortgage. If you would like more information, please contact our friendly staff today.

It’s winter, the mornings are cold and day looks grim. Dark clouds are brewing and now it’s raining. Everyone around you has an umbrella and scarf and you are wearing a straw hat that makes everyone look as they walk past.

Is standing out from the crowd such a bad thing?

To be a successful investor, you cannot constantly be swayed by changing the opinions of outsiders. Our Investment Committee is not distracted by short-term trends in the financial markets or the constant headlines and negative press we are exposed to in mainstream media commentary. Being able to maintain a long-term focus and not overreact to optimism or pessimism is critical for investing success.

Warren Buffett once said,

“The most important quality for an investor is temperament, not intellect. You need a temperament that neither derives great pleasure from being with the crowd or against the crowd.”

At The Investment Collective, we choose Australian companies that exhibit some form of “economic moat” to help protect the business against competitors.  This may include:

• Strong branding
• Efficiencies of scale
• High barriers to entry
• Switching costs

Our Investment Committee seeks out opportunistic investments where we view market pricing as not being representative of future predicted returns.

Markets will continue to rise and fall. Working alongside you to manage your investments, we help you make more informed decisions and seek to minimise your emotional burden.

If you would like to know more about how The Investment Collective can help you with your investment strategy, contact us to make an appointment today.

“Sell in May and go away” is a well-known saying in relation to share markets.  Does it have any validity?  Well, the first question that needs to be answered is “go away for how long?”  The phrase is likely a take on an old English saying “sell in May and go away, come back on St Leger’s Day”.

Horse racing buffs may know that the St Leger Stakes is run in September each year.  So, the rationale would be to sell shares in May and buy them back in September expecting the (buy) price in September to be less than the (sell) price in May.  Easy enough.  Let’s see how successful this would have been.  We’ll keep it simple and not include buying and selling costs or tax implications.
We’ll use the ASX top 200 index (the XJO) to back test the strategy.  We’ll compare the value of the XJO at the beginning of May to the value at the end of August for the last 20 years.  Here’s the table of results:

Summarising these back tested results for 1997 to 2016:

• The “sell in May and go away” strategy would have produced a beneficial outcome in 11 out of 20 years. The average beneficial percentage is 6.2%.
• The “sell in May and go away” strategy would have produced a detrimental outcome in 9 out of 20 years. The average detrimental percentage is 6.5%.

“Sell in May and go away” would have produced only a marginal benefit if applied as noted here over the last 20 years.  An interesting saying, but not a viable strategy.

Please note, this article is for general advice purposes only. It is not taking into account your particular circumstances or your personal finances. As mentioned above, this is a simplified analysis, and does not take into account certain financial implications (such as buying and selling costs and tax implications). If you wish to discuss the matter in further detail or wish to book an appointment to discuss your personal financial situation and future financial goals, please contact us to book an appointment with one of our advisers.

Being a mother is so many things, especially a new mum. It’s demanding, rewarding, relentless, remarkable and utterly exhausting, just to name a few. As the first few days, weeks and months roll through it is an all-consuming role that can feel overwhelming, claustrophobic and lonely all at once.  There really is no other comparable responsibility.

It is commonly said that no one can prepare you for motherhood (or parenthood), but the same can be said for the return-to-the-workforce post child. For some, a completely new level of emotion kicks into gear when the time comes to re-entering the workforce. This can be for a variety of reasons: fear, sadness of leaving the child, potential loss of confidence and skills due to time out of the workforce, uncertainty around employment expectations, just to name a few. Whilst these feelings are all valid – especially in environments that are particularly dynamic – I feel overwhelmingly, that the stimulating, interesting conversation (and a hot cuppa) outweighs any indecision.

Having returned to work following twelve months maternity leave last year in September, there are a few points relating to my financial future I thought I’d share:

Budget – and stick to it! Knowing where your money goes is crucial.

Save – as much as you can afford and start as early as possible.

Women are certainly faced with many life events that can impact income and long-term savings via superannuation. Obviously having a baby, parental leave, returning to work potentially on part-time hours all contribute; but also, getting married, divorced or losing a partner to illness can have a significant effect on longer-term objectives. Having the right insurance in place can assist in most of these situations to ease the burden financially and concentrate on recovery – and family.

Please note, this article is for general advice purposes only. It has not taken into account your personal circumstances or financial goals. If you wish to access more personalised advice tailored to your circumstances and financial objectives, please contact our friendly staff today.

I am a mother of three and had my youngest daughter at age forty. Ten months into my maternity leave I was offered a voluntary redundancy. I jumped at the chance to have a few more years raising my daughter and being a stay at home mum.

I then worked in a casual job cleaning 6 local motel rooms with my toddler as my right-hand girl.  Twelve months into that job I was ready to progress back into a more challenging role and to go off to work on my own.

I searched Seek and the local paper looking for that perfect role, not full time or weekends as this was my family time. Despite searching regularly I wasn’t confident enough to apply for any of the roles on offer. A close friend that I had previously worked with was five months into her first pregnancy, so I enquired into a relief role for 12 months. I thought this could be a good way to ease my way back into the workforce and give myself that confidence boost us stay at home mums need. I prepared my resume (which I had to Google, having been quite a few years between jobs), and forwarded this to my friend to pass on.

I had my interview and was offered the role then and there. Starting back at work was a challenge. Just using Word, Excel and a system that is all number coded alone took a while to sink in. I had six weeks extensive training and then I was left to my own devices. My first week working alone I would go home every day saying, “I don’t know if I can do this”. Eventually, I got my groove, my own routine and I felt more and more confident.

Many friends and family are still looking for that lucky break in finding employment. I was one of the lucky ones, I had my friend put in a good word and my employer take a chance. I am now a Portfolio Administrator at The Investment Collective.