Q: My husband and I are directors of our own construction company. We have reached a point where we are out of out depth with how to measure our progress and be able to see if our business is viable and our debts measureable and managable. We are lost as to what we should do next to get our debts under control. Should we seek advice from a financial planner?..and can't our bank manager help us with this planning?
A: Hi Clare,
Thanks for your question, and hopefully the feedback so far is helping.
We very often see with business owners that it is a real challenge when they are trying to juggle many different roles – set the direction and strategy of the business, take care of the day to day running, and also look after the financial side. If you are like many business owners I work with, I’m sure having to wear so many hats can be a little overwhelming and you would prefer to just be focusing on what you’re passionate about - the actual construction side of the business.
I would certainly suggest seeking some professional advice, and we often see when people sit down with an advisor or accountant that the challenge is actually manageable and not as overwhelming as they first thought – but would certainly suggest getting on the front foot sooner rather than later.
I would be happy to have a chat and see if we can help, I work in Financial Planning and also work side by side with an accountant who specialises in the Business Advisory space.
At the very least, I’m sure we will be able to point you in the right direction.
Feel free to contact me on 07 3144 3100 or email@example.com.
T: 07 3144 3100
Q: I have $100,000 in my SMSF and want to invest it in the stockmarket, where do I start?
A: Hi J A,
If you are looking to start investing through your SMSF, whether direct shares or other investments, there are a few things to look into.
- Once you have established your SMSF, you will need to set up an investment strategy (document outlining the fund’s investment objectives). This will determine what the fund can invest in, and the target asset allocation ranges.
- The investment strategy and asset allocation should be based on your circumstances (as well as any other members in the fund), and your risk profile and investment time-frames. It should also take into consideration factors such as liquidity of assets, and diversification of the portfolio.
You can certainly have direct shares as part of your portfolio in an SMSF, you will just need to make sure any investment is in line with the plan outlined in your investment strategy.
I would suggest speaking with a professional who can guide you through the process of setting up a strategy that aligns with your goals, and who can also assist with implementation.
Hope that helps, and feel free to give me a call if you have any questions or would like to discuss further.
T: 07 3144 3100
Q: Is now a good time to be looking at a fixed rate, what are the pit falls of fixed rates?
A: Hi Jackson,
This is a question that we are seeing a lot at the moment.
Interest rates are currently at historic lows, so it certainly looks an attractive time to lock in these low rates. Fixed interest rates also offers an extra level of security, knowing exactly what your required repayments will be for a period of time.
However, it is worth noting that many economists are predicting rates to stay at these low levels for the foreseeable future, and when choosing their fixed rates banks will factor in likely interest rate movements for the fixed period. This suggests that variable rates may be likely to also stay at low levels over the next couple years (though no guarantee).
Probably the two main pitfalls of fixed rates are the lack of flexibility with repayments, as you are often limited with the amount of additional repayments you can make over and above the set level, whereas you will have much more flexibility with variable rates. The other pitfall is there will generally be break costs if you were looking to refinance, so the flexibility of moving between lenders is less than with variable loans.
One option is to split your loan, providing extra flexibility around repayments with the variable portion, while also having some additional certainty with repayments on the fixed portion.
Overall there are various pros and cons of both options, and it is a case by case scenario.
If you have any further questions don’t hesitate to contact me on 07 3144 3100, and I would be happy discuss in more detail.
Announcer Financial Planning
Q: If you could pay up to $600 a week off a mortgage, approximately how much could you borrow currently?
A: Hi Dan,
There are several factors that a bank will take into consideration when determining serviceability for a loan, including family income, current assets and liabilities, number of dependants, and credit history.
Different lenders will also have slightly different requirements, and it will also be influenced by whether it would be for an own home or an investment property.
It would be worthwhile to talk to someone who after understanding your overall situation would be able to guide you on your options.
If you have any further questions don’t hesitate to contact me on 07 3144 3100, and I would be happy to point you in the right direction.
Announcer Financial Planning