Develop Investment Strategies
We can help you develop investment strategies to build wealth prudently and tax effectively to help you become financially independent… and to provide a more financially secure retirement.
In addition, we can assist you in protecting your financial position with the help of personal insurances, as well as referring you to finance broking professionals who can help you to create financial efficiencies with your mortgage.
What are the building blocks for prudent – and tax effective – wealth creation?
There are a number of elements you should consider in building your wealth creation plan.
For example, you should maximise the opportunity afforded by superannuation – it is, simply, the most tax effective way to save for retirement.
You might consider also accumulating wealth outside of superannuation, as superannuation does have its drawbacks such as not being able to withdraw money until you retire. You could do that by investing your after-tax savings on a regular basis, or you might consider borrowing to invest (or gearing). Gearing carries tax advantages and can therefore be particularly attractive to higher income earners. Gearing does, however, add extra risk to your financial plan and will magnify losses on your portfolio.
As you build your investment portfolio – in and outside of superannuation – make sure you diversify your investments. Use the mix of high quality shares, property, fixed interest and cash which meets your liquidity needs, your time horizon and your tolerance to risk. Keep in mind, also, that some investments are more tax effective than others.
You should also ensure you keep investment transaction costs and ongoing investment fees low. Usually this can be achieved by investing in a mix of direct assets and passive managed funds, with a few high quality actively managed funds.
A Self Managed Superannuation Fund (SMSF) can be a very cost effective vehicle to house your superannuation investments, give you control over how your super money is invested, and can provide you with extra tax savings.
You should also make sure that your income is protected should you become seriously ill or injured, or if you die. For most people, that means they need to purchase life insurance and income replacement insurance from a reputable insurer. The good news is that income replacement insurance is generally tax deductible.
Protecting your wealth is just as important as creating it
Your wealth could come under threat from external sources such as taxation, litigation and uninsured loss. The good news is that most of these threats can be mitigated, and you should consider a number of strategies to protect your wealth, including the following:
- House your investments in a way which protects them from the possibility of you becoming bankrupt or being sued. For example investing in your spouse’s name… or in a family trust… or in an SMSF.
- Minimise tax by investing in growth assets… income splitting… using superannuation or a family trust… and so on.
- Fully insure your and your spouse’s health, life, income and key assets.
- If you are gearing, do not over-commit by borrowing too much.
- Invest in quality growth assets for the long term. Avoid investment scams.
- Invest in sound financial planning advice to make sure you have adequate risk mitigation strategies in place.
Health Check Check for Women
Many women will spend some of their lives without a partner – either because of choice, divorce or widowhood. It’s important, then, that all women have control of their own financial future. As a starting point, you might like to try the following Financial Health Check.
Contact us today to discuss how we can work with you.
Damian Jenkins is an Authorised Representative of Personal Financial Services Limited (PFS) ABN 26 098 725 145, AFSL 234459. This information has been prepared by PFS. The taxation position described is a general statement and should only be used as a guide. It does not constitute tax advice and is based on current laws and their interpretation.
This information has been prepared without taking into account the investment objectives, financial situation or particular needs of any particular person. Because of this you should, before acting on it, consider its appropriateness, having regard to your objectives, financial situation and needs.
