Are you underinsured? The personal protection essentials


wealth
Do you rely on the standard protection in your superannuation fund? The average super fund insures for around $200,000 for life insurance and often doesn’t have any income protection at all. Take a moment to think about your expenses: how much is left on your mortgage? What about school fees, car payments, bills, rates, etc. How would your family cope if you weren’t around or weren’t able to work?

When it comes to life insurance, most people need $1 to $1.5 million to maintain their expenses.

So why are so many people underinsured when it comes to income protection and life insurance? It’s simple, really: most people don’t worry about these things until it’s too late.

The best time to think about life insurance and income protection is right now! It’s always a good time to discuss protecting your future, but there are also times when it should be at the top of your list.

If you are taking on a mortgage or refinancing, then you must talk about insurance! This is the time when your insurance is most likely to fall short. And, if you never discussed your life insurance when you purchased your home, then now is the time to start.

A Financial Planner can help you understand strategies to make sure you have personal protection suitable for you. They can assess your spending so you can protect your family’s lifestyle, look at cover against increased medical expenses, assess for personal debt protection and look for policies with flexible features.

Talk with a Financial Planner on how to structure this insurance into your super to make it tax effective. In fact, there can be tax benefits if you insure in the right way. Speaking with a someone who has the ability to shop around and find the best insurance for your situation is the best way to guarantee peace of mind.

Don’t wait until it is too late, get properly covered today!


Financial Advisor Phillip Richards
Phillip Richards is a qualified Financial Advisor with more than seven years’ experience in the industry. His expertise in investment, debt management, retirement planning and insurance will help you assess your options to build your wealth. Contact Phillip today to discuss how you can build your own wealth and plan to reach your goals.

This information is general in nature and does not take your personal situation into account. If you are interested in taking control of your wealth, contact Endorphin Wealth Management.

Tax effective investment in a low interest environment: what’s next for Melbourne investors

Old balance and orangesWith the cash rate kept on hold at a low 2.25% (RBA reports April 2015) and tipped to fall further in the coming months, those who are shy of investing need to consider their options. This low rate has led to a fall in interest rates on savings, term deposits and high interest accounts – with most now offering around 3%.

The big question is: how do you invest in a low interest environment? Having cash is great, but when that cash is now earning barely any interest, you need to start considering other options. You should contact your Financial Planner to discuss what options are suitable for you.

An investment in Australian shares is a great example of one of the options available. People often forget to factor in the tax considerations and inflation (rising cost of living) and how this will impact their overall outcome. In the year ending December 2014, the inflation rate was 1.7% making a big difference to the effectiveness of any type of investment.

This kind of investment is great for those who have cash saved for a home deposit, their retirement or in a Self-Managed Super Fund (SMSF).

Case study: Mary has $500,000 cash in savings:

If Mary puts this money in a term deposit for 12 months 2.95% with an Australian “big 4” bank it will earn $14,750 in interest and be taxed $5,752.50. Her total investment, after tax will grow to $508,997.80 barely keeping pace with inflation.

However, if Mary sought advice and had a well-diversified portfolio of high quality dividend yielding investments recommended by her Financial Planner, she could be in a different position. Investing in shares at an assumed dividend income of 4.55% and with franking credits to help out at tax time, Mary can expect to comfortably outpace inflation and see her investment grow to $519,201.

Generally, Mary’s investment in shares may also offer a capital growth return on average of 5% in addition to dividends. This means her investment could potentially go up by $25,000, bringing her total investment to $535,701. Capital gains tax, in this case, is not payable until the sale of investments.

Through a diverse portfolio of quality dividend yielding investments, Mary is able to grow her wealth exponentially. Not to mention that, as a long term investment, she now has an additional $35,000 to invest in order to earn a return on.

Contact an Endorphin Financial Planner today to discuss how investments in shares can make your cash savings work for you.

This case study is based on assumed figures. Please contact a financial planner to review your options and what is best for you.

Financial Advisor Phillip Richards

Phillip Richards is a qualified Financial Planner with more than seven years’ experience in the industry. His expertise in investment, debt management, retirement planning and insurance will help you assess your options to build your wealth. Contact Phillip today to discuss how you can build your own wealth and plan to reach your goals.

This information is general in nature and does not take your personal situation into account. If you are interested in taking control of your wealth, contact Endorphin Wealth Management.