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Marcus Netto

Financial Planner

Announcer Group

www.announcer.com.au

Sydney, New South Wales

0292515558

In my journey to becoming an adviser, I think I have definitely taken "the road less travelled". I say this because I had my first exposure to the financial services industry many years before actually making a career out of it. I used to "work" at my father's small advice practice after school and on weekends, helping him organise paperwork, file documents and arrange for client letters to be sent out.

I think it was this time in my life that actually laid the foundation for what would ultimately become my career.

After finishing high school I decided to follow my passion for food and began a chef's apprenticeship. I worked my way up the ranks of some of Sydney's best restaurants, then took my skills abroad after deciding to "pack up shop" and leave for London in my early twenties.
After 8 years in the hospitality industry, I made the decision to make a change and to follow what was becoming a new passion and begin my studies in financial planning, eventually following through with a complete career change into becoming an adviser.

This definitely wasn't the conventional way to go about things but if given the chance to go back in time I would most definitely do it all again. Those experiences were some of the most enjoyable (and tiresome) of my life but I truly believe that they helped shaped me as a person.
Those experiences taught me to be truly independent, the value of hard work and the importance of consistency. I still carry those traits with me today.

I feel lucky to be part of the team here at Announcer. They not only allow, but encourage me to build strong relationships, be proactive both in my personal and professional life as well as giving me the necessary guidance in key areas of my career development.

To be able to do all of this with a group of people that I enjoy spending time with both inside and outside of work makes me all the more grateful for the opportunities that I have been afforded.

https://au.linkedin.com/in/marcusnetto

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answered

Q: I've recently taken on a new mortgage and have a small amount of leftover money each month, am I better to pay it into the mortgage or are there investments that will perform well enough to offset the mortgage interest?

A: Hi Rob,
That is a great question and with interest rates at historical lows as they are currently, it is a question that many other people are asking as well.
There is no hard & fast rule with how to structure your personal debts vs your investments, there may definitely be opportunities to look at an investment that may give a greater return than the interest that is being offset but whether or not these investments are right for you will depend on a few key things.

Firstly, assuming that the loan you are referring to is for your own home, it would be classified as a non-deductible debt. It is always preferable to try and reduce your non-deductible debts first as there are no immediate tax benefits of keeping this debt high. Also it can be beneficial to build up the equity in your home. You may then be able to borrow against this equity and use these funds to invest, the interest repayments from which would be tax deductible. Key benefits of this strategy is that your debt is now a deductible debt and the rates at which you can borrow against equity are typically lower than investment or margin loans.

One key thing to take in to account when deciding if a strategy such as this is appropriate to you is your marginal tax rate. This type of approach is best suited towards people in higher tax brackets because the interest repayments can be claimed as a deduction and would therefore lower their relatively high level of assessable income.

Secondly, what are your time frames? Most investments (excluding day trading) require a typical time horizon of between 5-7 years at a minimum. These types of investments can include Managed Funds, ETF's and direct shares and even direct properties. It may not be appropriate to be allocating surplus funds to an investment if you could realistically need those funds available for any number of reasons i.e. holidays, upgrade in vehicles, medical costs, emergency funds etc.

Owning direct shares within Australia can have added tax benefits through the use of franked dividend and franking credits but this would again be most effective for individuals on a higher Marginal Tax Rate.

The last and most important consideration to work out what is your overall strategy. What this can be an integral part to investing successfully. What I mean by this, is that it helps to have a clear understanding of your longer term objectives and WHY it is we want to invest and what are the outcomes are that we are looking to achieve.

If you would like to chat about this further feel free to give me a call or shoot me an email.
Kind regards
Marcus Netto
02 9251 5558
mnetto@announcer.com.au