01 Jul 2014 03 Jun 2015
Imputation 9.80
Cash 1.88
Global Technology 35.28
Health & Biotech 58.12
High Growth 13.63
Overall performance 01 Jul 2014 03 Jun 2015 25.37
We emailed a young client their portfolio this week & this was the performance that was enclosed in the report.
Yes It is a simple portfolio using a simple master trust & using fund managers. The young client is not selecting direct shares as that is not her skill set.
She isn’t a trustee of a SMSF because she doesn’t want the responsibilities of being a trustee & the costs she pays the hangers on to advise her.
She has it on a master trust because the taxx man wants his grab & hence there is record keeping required. The taxx agent generally guesses.
In fact it is outside the super system as a major risk is Legislative risk.
We see this when both parties are suggesting their view of raiding your super in the next election.
Of course we discussed asset allocation when we actioned this portfolio which was before the AUS dollar fell 30% & before the Nasdaq went to a high.
Maybe we should invest the sisters moneys says the young client.
As all small print in disclaimers say future performance is no reflection of the past just like relationships.
And then we had this week also to find a decent term deposit rate for Allison’s mother who is not young. She doesn’t want shares as they have volatility. So do relationships as Allison knows.
Here was the choice
Current rates
Term deposit interest rates for the week ending 05 June 2015
| Issuer |
2 years |
1 year |
6 months |
3 months |
2 months |
1 month |
| NAB |
2.92% p.a. |
2.90% p.a. |
2.90% p.a. |
2.87% p.a. |
2.60% p.a. |
2.23% p.a. |
| St. George Bank |
2.95% p.a. |
2.70% p.a. |
2.70% p.a. |
2.65% p.a. |
2.60% p.a. |
2.40% p.a. |
| Adelaide Bank |
n/a |
2.70% p.a. |
2.75% p.a. |
2.70% p.a. |
n/a |
n/a |
Note: Interest rates are indicative
Certainly not exciting when medical costs are accelerating as mothers appreciate in age.
And then we had two recent discussions from mining clients
Hi john
17 business went bankrupt in Karratha in the last two weeks!!!
Massive correction in the market!! Only one making money is the removalist!!!
We had sent them ‘Median house prices in the Pilbara town of Karratha have plunged almost 34 per cent as the mining downturn prompts residents to leave.
Real Estate Institute of Western Australia data for the year to March shows the average price in Karratha has fallen to $450,000.
That compares to $650,000 in the March quarter last year
http://www.theaustralian.com.au/business/latest/house-prices-plunge-in-was-pilbara/story-e6frg90f-1227370009283’
And from Moranbah
Our son has just been laid off.
Of course he bought a house there because the rents were so high.
If he has to move with his family what equity will there be left. Just maybe negative equity & then what does the bank do?
Only this morning we were called by a major fund manager who explained that they were making a large distribution because they had sold over priced shares e.g. banks in April.
They called because there would be capital gains & hence Taxx.
We note the very average returns in the imputation fund by definition is generally in the banks & Telstra.
As most SMSF are.
Another reason for professional fund managers who have more information than Mum & dad trustees.
One last thought bubble. We reached a certain age recently which no one except Big Brother acknowledged.
We had to sign a parcel from the Australian Government that contained a Bowel Testing kit. Do you really want your Taxx being spent on analysing our POO.
We didn’t think so.
What a Nanny State!!! How many are sucking on the government tit?
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
07 3848 1088 orThis email address is being protected from spambots. You need JavaScript enabled to view it.or visit our new website
John McAuliffe
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By the government we mean all parties because as the last year has shown us the senate is the filter that decides and you know who is on that.
How did we arrive at that Number?
Here are the proposed changes to Pension asset test thresholds
The government will reduce the maximum value of assets outside the family home a couple can hold while still qualifying for a part pension, from $1.15 million to $823,000.
The threshold for single retirees will drop from $775,000 to $547,000.
Pension assets test thresholds
The government has announced the following changes to the pension assets tests thresholds:
| Full pension (Assets below) |
Part pension (Assets below) |
||
| Single – Homeowner |
$250,000 |
$547,000 |
|
| Single – Non Homeowner |
$450,000 |
$747,000 |
|
| Couple – Homeowner |
$375,000 |
$823,000 |
|
| Couple – Non Homeowner |
$575,000 |
$1,023,000 |
|
Simply as today’s 1 year term rate = 2.9% X 823,000 = 23,867
Over that then you are on your own although you will have access to the health card if you actually believe in the health system.
This allows for the fact that you own your house which for maybe 40% of couples who have been separated, divorced, made redundant, retired due to ill health or otherwise is unlikely to be the case.
Then there is this.
| In addition, once you exceed the lower assets test threshold the tapering rate will change from a $1.50 per $1,000 reduction to $3.00 per $1,000. These changes impact not just the Age Pension but other pensions paid by both Centrelink and Department of Veterans’ Affairs such as the Disability Support Pension and the Carer Payment |
What that means for you is if you are caught in the middle then you will also receive less in pension from 1st January 2017.
So a single non home owner can earn up to 747,000 X 2.9% = 21,663 before she loses all pension payments.
What happens if interest rates fall & arguably globally that is very possible?
Do you want to take on & invest elsewhere & take on higher risk when that might take you out of your risk comfort zone?
How much of your portfolio do you invest in growth or higher income assets.?
Of course you don’t want to be at all ill or reliant on your GP as P stands for practice.
Surveys have found the average couple spends 140p.w. on health related matters.
We do have the answer that works for us on health if you care to listen.
You might consider this as an option form Morningstar.
To qualify for the age pension, Biti says people may look at ways to reduce assessable assets, but such opportunities are not always wise options.
Options include: gifting within allowable limits; purchasing a funeral bond or pre-paying funeral expenses; buying a more expensive home or doing the upgrades you want; moving into aged care and paying a refundable accommodation bond; buying an expensive car and driving out of the showroom (it will be worth less than what you pay for it); ensuring you don't overestimate the value of your property/contents; and spending more money or not saving.
"Before implementing a strategy to reduce assessable assets, people should ensure they will still have sufficient resources to meet cash flow for their future lifestyle needs and health/aged care needs," Biti says.
That option only puts you really in the hands of Centrelink & do you want that?
The changes to aged pension eligibility were flagged late last week by Social Services Minister Scott Morrison who said 90% of the 3.7 million Australians who receive the pension or pension-linked payments will either be better off or see no change to their payments, approximately 91,000 current part-pensioners will no longer be eligible for the pension and another 235,000 will have their payments reduced.
Then we have Chris Mango saying that hard Labor will consider & run as an issue in the next election a taxx on the wealthy & their supers.
Yep government legislation is a big risk.
How do we define wealthy as an income of 23, 867 is surely not wealthy?
And Please define fair.
These changes are more than a year away which is a reason they went through. However compound interest needs time & earning rates & taxx efficiency to achieve your goals.
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
07 3848 1088 or This email address is being protected from spambots. You need JavaScript enabled to view it.or visit our new websiteJohn McAuliffe
Assets taper test to impact aged-care
20 May 2015
Proposed changes to the assets taper test could have negative implications for part pensioners and older Australians looking to downsize and move into a retirement community or aged care facility, Aged Care Gurus has said.
From 1 January 2017 the government has proposed to increase the assets taper test - the amount by which a person’s pension entitlement decreased under the assets test - from $1.50 to $3 per fortnight for every $1000 of assets above the lower threshold.
The lower assets threshold would also rise for both homeowners and non-homeowners should these changes be adopted.
“It’s really important to stress that people on the full pension with the lowest means are not going to benefit at all from these changes,”
“It’s designed to benefit the people in the middle - people who are just over the asset test threshold.
“The very wealthy won’t get a pension at all,”
The Colonial First State’s (CFS) Firsttech federal budget briefing paper released last week said government forecasts predicted about 91,000 people would lose their entitlement to the pension, 235,000 would have their pension reduced and 170,000 would get a pension increase if these changes went ahead.
“Under these proposed changes the assets test taper rate will return to the 2007 level and will result in a substantial reduction in the upper assets test threshold,” the report said.
Financial planners needed to be aware of the potential for change and the impact on aged care placements should the proposals be adopted,
“What the government has done is put a greater emphasis or advantage on people who keep the family home [as an asset] rather than sell it when they move into aged care,”
“People who downsize their home to move into a retirement community or aged care facility often pay less than the value of their home.
“Under this change downsizers may be better off paying an amount that is equal to or greater than the value of their current home.”
‘So let me now turn to three public policy areas that exemplify the degree of change required: health, education and the retirement income system.’
That is what we always tend to do - we begin with a solution, like a price signal, or a fee change, or an eligibility change, and it's the wrong place to start.
We have to start by asking ourselves “what is the problem we are trying to solve, what outcomes are we seeking and what do we want to move from and to?”
If we do not adopt this architecture in our approach to the big policy issues, we will continue to have the community reject what they perceive to be disconnected and short sighted interventions.
Health – Philosophical Shifts
In health, we need to change the mindset from one of fixing people when they are sick, to enabling them to stay healthy for as long as possible.
Put bluntly, the focus needs to shift from the second 50 years of life, to the first 50 years; that is, preventing the things that are preventable and preserving constrained resources for those which are not.
Education – Philosophical Shifts
Turning now to education and training.
We must move away from the notion that work is something we begin after a long period of study, to one where work is integrated with learning.
Given that an estimated 75 per cent of the fastest growing occupations, including those in the creative industries and humanities, will require STEM related skills and knowledge, the imperative for introducing these foundational skills into the primary and pre-primary curricula should be unassailable.
By STEM skills, I mean maths and science, yes, but also computer coding, computational thinking, problem solving and design thinking.
As it stands in Australia, however, the gap between the digital literacy of our young people and that of our competitor nations is increasing.
Retirement Income
Finally, on the so-called retirement income system, the philosophical shift we need is to rethink the current concept of retirement.
This means a paradigm shift about people working longer and training later in their life as the types of jobs available, and the type of work they can do, change.
The role of government would be to provide an adequate safety net, but more importantly to assist people to become, and stay, independent by fully participating in the economy.
Leadership
In the first instance, however, the leadership must come from our elected representatives, and this includes the opposition, minor parties and independents, who are all part of our governance structure.
The role of these representatives is to provide leadership, not to be re-elected.
It must be leadership characterised, not by positional power and, as Jennifer Hewitt notes “a preoccupation with the political present, but by strong personal values, consistency, respect and transparency.”
And who is Catherine Livingstone?
The full article in front of the Press Cub in Canberra on 29th April 2015 is very worthwhile reading by You & I & we trust Tony & Joe were there & listened to Catherine.
Can Australia take the adult step that the UK just showed in their recent election?
We viewed Country House Rescue on Sunday where Simon the business advisor was invited in for his advice. It wasn’t taken & Francis the Failure will be remembered as losing for the family 400 years of history & wealth. His F*** language was not cut as it emphasized his frustration & unwillingness to bend.
Will you Listen?
Lets preserve & increase our self reliance.
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
07 3848 1088 This email address is being protected from spambots. You need JavaScript enabled to view it. or visit our new websiteJohn McAuliffe
Call 07 3848 1088
Send SMS
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