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About Me

James Wrigley

Current Rating: 4.93 / 5
Financial Planner
First Financial
https://firstfinancial.com.au/james-wrigley/
Melbourne, Victoria
0422 354197
Father of two.

My love of numbers started way back in Primary School, I can remember doing really well on a maths test in grade one and my teacher at the time gave me some money to buy any icy pole as a reward - the proudest moment of my life up until that point!

As time went on I found myself helping people with their numbers, helping them study for their maths tests through high school or exam revision whilst at University. It was a natural progression that I found myself providing Financial Advice to a range of different people, of varying life stages. Be it singles, families, entrepreneurs, those approaching or in retirement, I now help a range of people on a daily basis - and I love it!

It's working with new people that I enjoy the most. Finding out what makes them tick. What are their proudest moments, their aspirations and frustrations. I then look partner with them, to develop a plan around making the most of the position they are in, so they can ultimately live the life of their choosing.

I provide proactive advice along the way, simplifying the complexities of the financial world. Allowing my clients to have the confidence to concentrate on what they do and enjoy best.

Please don't hesitate to reach out if there is something I can help you with.

Feel free to book a time to meet with, or talk me. You can book some time in my diary through the following link:

https://calendly.com/jameswrigley/30min

My Activity

answered
Q: Hello,
I work for a not for profit organisation 4 days a week and get a paid fortnightly. I noticed recently there is no mention of super on the payslip, not that I could find. Are not for profits exempt from paying super?
A: Hi Tracey,

To my knowledge you should be being paid super too.

I’d take it up with your payroll department.

Regards
James
answered
Q: We want to buy a property in Port Macquarie with a view to relocate and retire in 5 or so years. Can we purchase the property through our SMSF, borrow money and then pay it off when we make the move?
A: Interesting response Brendan, and I agree with the short term expense of stamp duty etc.

Interested in your comments on a variation of the above question. What if I purchase a property in my SMSF because I believed it a good investment (eg good capital growth prospects) for boosting the value of my super fund to provide retirement benefits later. Fast forward 10 years and I’m now retired and I think, you know what? I wouldn’t mind living in that property owned by my SMSF. So I sell my existing principal residence, then use the cash to buy the property from my SMSF (at market rates).

Do you see a problem with this?

Thanks
James
answered
Q: Hi,
I have a SMSF and finding it difficult to maintain it time wise. Is it possible to unwind and what do I need to do?
Thanks
A: Hi Jonah,

This is a very common experience but good on you for acknowledging and trying to fix the problem.

Yes, the SMSF can be wound up & your super moved back to a retail super fund.

Depending on what your SMSF owns this may take some time (more than likely whatever you own will need to be sold). Given you've got the SMSF now I imagine you have some relationship with an accountant who has assisted with the annual reporting requirements - I'd start by contacting them and explaining you want to wind up the SMSF. They will be able to help you with the wind up.

If you get stuck, reach out. I'm happy to help.

All the best.
James

james.wrigley@firstfinancial.com.au
03 9909 5800
answered
Q: Hello, my wife and I are in our late 60’s and have 600,000 in our self-managed superfund. We have 2 kids in their 30’s who are struggling to buy a home we would like to ask if it was possible for us to distribute the funds a gift so they could buy their first home?
A: Hi Peter,

This is an interesting one, that needs to be addressed in a few stages.

1. Can you take money from your SMSF? Most likely yes given your ages but tread carefully. Will depend on if you are still working or not & are you under or over age 65 (you say late 60's so probably ok) and the types of accounts you have within the SMSF (there are some that restrict your withdrawals regardless of age).
2. Can you gift money to your children (once you've got it out of the SMSF)? Absolutely yes you can.

Assuming you can get money out of your SMSF, the question is then how will you support yourself?

If you are gifting money (or anything really) to your children, Centrelink will count the money as yours for a period of time. Eventually any age pension you may be entitled to will be adjusted accordingly but it may take up to 5 years. How will you support during that time?

The competing priorities of wanting to help children as well as ensure you can support yourself is very common & something I have seen with my own clients many times. A balance can be struck.

If you would like assistance working through all of this please don't hesitate to reach out.

All the best.
James

james.wrigley@firstfinancial.com.au
(03) 9909 5800
answered
Q: Hi,
A year ago I started a new job and needed a car, my employer suggested a novated lease. I was made redundant last week and now they are saying the car is in my name so I have to keep making the repayments. Is this right… what are my options?
A: Hi Mel,

Sometimes there's also a built in redundancy benefit in your lease agreement where they may cover the repayments for a period of time. Check with your lease company.

But as Scott has said, the car is yours and the liability to make repayments resets with you unfortunately.

All the best.
James
answered
Q: Purchased my first investment property in St Kilda and looking for an agent to manage the property. Any recommendations and what should their fee be?
A: Hi Nick,

I have a few clients who have used Pathway Asset management & are very happy.

https://pathwayam.com.au

Their property managers only look after a relatively small number of properties so the service is great.

All the best.

Regards
James
answered
Q: My family just inherited a large sum of money and i know we don't pay tax in the inheritance but if we invest in managed funds do we pay tax on the returns we get?
A: Hi Joseph,

You’ll want to be careful re. tax on the inheritance. There are some circumstances where tax will be payable eg. very likely if the money has come from superannuation in the name of the deceased.

So firstly need to work out if there actually is or isn’t tax payable.

Then you’ll need to work through how can they money best be used to support you and your family. Repayment of debts or investing to provide an income as some examples.

Once one & two above have been addressed then you can work through how best to ‘hold’ the rest so as to limit tax liability on any income the lump sum earns. Trust structures could be helpful here.

That then rounds you back to the beginning were the deceased may have had provions in their will that you could have elected to receive the inheritance via a trust in the first place (known as a testamentary trust) - which can be very beneficial.

You need to see professional advice here, lawyer, accountant & financial adviser together. A few dollars in professional fees could save you theoghsands on an ongoing basis.

Please reach out if you need any further help from me.

All the best.
James

james.wrigley@firstfinancial.com.au
video
Did you win $100M?

answered
Q: Hi

Just wanting to work out my concessional contributions for the financial year ending 30 June 2019.

I do not want to exceed the $25k Cap.

Do I calculate my Salary Sacrifice and Employer Contributions from 1 July 2018 to 30 June 2019, or by the actual amounts that were deposited into my Account. I know there is a timing difference as it is generally deposited by the 21st day of the month after its been earned/sacrificed.

Many thanks in advance.
David
A: Hi David,

What matters is the day the contribution hits your super fund, that’s when it counts towards the caps. Not when you earn the money.

It get’s tricky & can be very easy to go over the caps if there’s a lag. As Glenn suggested, get the information direct from your super fund & don’t rely on your payslips.

Good luck
James
answered
Q: About to complete our first development of 4 units and so far have sold three and thinking of keeping one. Our question is do we have to pay CGT on the unit we keep… how does it work?
A: Hi Leo,

Please confirm with your accountant. However, you only pay CGT when you sell something for a gain. So if you don’t sell it, there is no CGT to pay.

All the best.
James
answered
Q: Attending my first auction tomorrow as loan approval came through yesterday. Does anyone have any words of advice or tips on bidding?
A: Just sick to your budget and walk away if it goes too high.

Also, if there ends up being no bidders (like I witnessed 2 weekends ago) don’t worry. If you like the house enter after auction negotiations, don’t be fooled into putting your hand up.
answered
Q: When are all property, infrastructure, lend lease and ist property quarterly dividends due by date of that period quarter and how many do you receive each quarter at hostplus.?
A: Hi Steven,

I’m sorry, I don’t understand your question.

Regards
James
answered
Q: Hi All,

I hope you're all winning!

I have a tax question for the accountants here.

If someone has held a company for over 12 months and is now selling the business, will they be up for full CGT? Or do they get a similar concession to a real estate asset?

The business has been held by 2 directors and shareholders and will each have an equal share of the proceeds from the sale.

Cheers,
Frank
A: Hi Frank,

As you can see from the four responses, it’s not simple.

The conversation needs to start with what is actually being sold? This will dictate the tax outcomes.

In my experience the client doesn’t really know. They say they are selling their business or company but don’t understand they can actually be selling a variety of different things, one of which is shares.

The accountant involved will know what is being sold. If they don’t, have the client talk to one of the guys above.

All the best.
James
answered
Q: I contract full time to a company and have sub-contractors working for me. Hard to find the information I need to make sure I pay them properly. Do I pay their tax for them? Some sub guys want cash. I had a local accountant but it didn’t work out – do they need to be local?
A: Hi Will,

Your accountant does not need to be local.

There’s a couple of great accountants on here who will be able to help you.

All the best.
James
answered
Q: Hi,

I am currently transitioning jobs and I have been asked if I would prefer PAYG or to be paid as a Sole Trader.

Can you please tell me if I am financially better to PAYG or be a Sole trader?

Rate per day I will be earning is $550 including super.

Any advise would be greatly appreciated!
A: Hi Jade,

I would think the PAYG option would make your life easier as any tax would be paid for you. As a sole trader you’ll have to worry about the tax yourself & make sure you’ve set enough money aside.

Depending on your industry, there might be more claimable items as a sole trader - the accountants on here will be able to provide better advice here.

Regards
James
answered
Q: I was reading in the Financial Review that I could potentially rent out my SMSF investment property to a family member as long as it is done at a commercial rate. I much prefer to rent to someone I know. Is this true?
A: NOOOOOOO!!!!

You can not rent your investment property, owned by your SMSF, to a family member.

If you have a commercial property (factory, shop etc.) then you can but if it's residential property it's a big NO.

All the best
James
answered
Q: What would be a good or aggressive or safe approach when choosing options available in superannuation funds for next 4 months?
A: Hi Steven,

Superannuation (or any investing) is not something you should be measuring for the next 4 months, it's far too short a time frame.

No one in the world has any idea if markets will be up, down, left or right over the next four months.

If your time horizon for whatever is going on in your life at the moment is only 4 months, it's likely a cash option (where you have no chance of losing money) is your best option.

You really do need to talk to someone who can help you. Pay for some advice, you'll get all the answers & clarity you need. Doing it yourself by Googling things is not going to give you the answers to your specific situation.

Regards
James
answered
Q: Hello, on a commercial property loan of $330k from a tier 1 lender we are borrowing about $120,000 through our SMSF. Are such fees usually requested by the broker, the broker wants to charge $1,000 upfront? ? Is this standard industry practice for non resi loans or a matter of which broker can get away with these fees from the borrower?
A: Hi Fiona,

It’s a matter of which broker you use.

It’s becoming more and more common for brokers in the SMSF space to to asking for some type of payment upfront. SMSF loans are getting harder and harder to obtain so the brokers are looking to be paid for part of their work upfront - otherwise they spend lots of time working on something that may not settle & they never get paid for their work.

Talk to another broker if the upfront fee puts you off.

All the best.

James
answered
Q: Hi there

Got some great responses last time I posted here so hoping for a similar result!

I am a beneficiary of a deceased estate split into 3. We recently put the property up on Airbnb for some rental income whilst we wait for the property to be sold.

We did some work to the property readying it for lease such as painting walls, purchase of linen, crockery etc.

1) Can these expenses be claimed? Obviously it's work done prior to being leased but integral to be able to do so. Or does any receipt need to show that the date of purchase was AFTER the commencement date of lease?

For our tax returns, we will be splitting income/expenses between the 3. The property had no TV or Vacuum and so one party paid for these items out of their own personal money as they will take these items as soon as the property sells.

2) Will their be any red flags if one party claims higher expenses despite splitting income by 3?

Looking at it now, I guess if the answer to question 1 is 'NO' then question 2 is probably void as these items were obviously purchased before our first tenant.

Thanks so much for assistance. Great community of help!

Steph
A: Hi Steph,

Is the property still owned by the estate or has it been passed out to the three of you as beneficiaries?

If still owned by the estate it's the estate that will claim (or not) the items you have mentioned above not the three of you as individuals.

Either way I'd be involving an accountant as the ATO has made it very clear they will be cracking down on AirBnB & Uber income so you are already in their sights, you'll want to tread very carefully.

All the best.

James
answered
Q: Hi, I have recently become the Executor of my dad’s estate. Through his current accountant, I have been recommended to see a Financial Planner as the whole estate is in ASX listed shares. I am worried about getting bad advice. What are some of the questions I should be asking the adviser to know if they are any good?
A: Hi Sam,

The wind up of the estate need not be difficult. Can you provide some context around the recommendation to see a financial adviser?

Is it because you will be beneficiary of a portfolio of shares? Is it to try and manage tax? Did the accountant say anything more?

I’ll then be able to help with questions.

Regards
James
answered
Q: I work fulltime and my annual salary is $97,000 and we are first home buyers and have $80,000 in savings and looking at a house for $625,000. Married with a one year old. My wife is not working at the moment and we have no debts and currently pay $350pw rent. Could we get a loan of $500,000?
A: Hi Lee,

I’ll play devils advocate here and ask have you run the numbers on affordability? I’m a single income family with two young kids and know the pressures that brings.

I’d hate to hear of you really struggling after you’d bought a house.

Your currently paying rent of $350 pw, repayments on a $500k loan are going to be something like $535 pw - that’s a huge increase to try and cover.

If your household income is going to increase considerably in the not too distant future (eg your partner goes back to work) then ok. But otherwise, please give some serious thought to the lifestyle impacts such an extra commitment will have on you.

All the best.
James
answered
Q: What is the best Hostplus super option to choose for someone nearly 60?
A: Hi Steven,

I second what Brendan has just said.

You've asked a few questions on here regarding superannuation, if you would like someone to talk to I'm happy to chat - either phone or Skype/Zoom is all fine.

Regards
James
answered
Q: Taxation query
I am asking for a friend. She was advised by the Commonwealth Bank to purchase their shares. She has now lost $36k due to their advice. Is there any way that she can claim this on her tax.
Thank you
Diane
A: Ageee 100% with Todd’s response
answered
Q: What are indexed international shares for superannuation mean?
A: The indexed international shares will be 100% international shares.

The indexed balanced fund will track an index of Australian shares, an index of international shares and likely some kind of bond index all in one option. Depending on what super fund you are taking about they will have a different definition of ‘balanced’ and therefore different allocations to the different indexes to form the balanced option.
answered
Q: What are indexed international shares for superannuation mean?
A: Hi Steven,

It will be an investment option within your super that tracks an index of international shares.

Just like the ASX200 or all ords are reported on the news each night (both are indexes) there are indexes that track international markets - this investment option will just track one of those international indexes.

Regards
James
answered
Q: I'm 55 my preservation age is 59. I have an personal super plan maturing soon. If I let it mature and don't spend the money, will I be taxed on this money. Or should I reinvest before maturity?
Also, I have an investment property I wish to sell. Can I avoid CGT if i live in this property? If so, for how long?
A: Hi Ian,

Can you clarify what you mean by you have a personal super plan maturing soon?

If you get access to super under the age of 60, regardless of if you spend it or not you will likely have to pay some tax. How much will depend on a number of factors but likely you'll have to pay some. Given that, best to not access until age 60 if at all possible.

No, you can't avoid paying CGT on the sale of the investment property. If the property has been an investment and not your principal residence, you will need to pay CGT for the period it was an investment - regardless if you decide to live in it now. There are ways of limiting the tax you pay (talk to your accountant & financial adviser if you have one) so paying for some advice here can be very worthwhile for you.

Let me know if I can be of further assistance.

All the best.

James
03 9909 5800
james.wrigley@firstfinancial.com.au
answered
Q: Hi, I am 30 and earn 87k pa. My boyfriend is 27 and doesn’t have an income (but will in the next few years). We have combined savings of around 150k.

My question is: what is our best move? Continue to save and put down a chunky deposit on a place in Perth (where we plan to live in a few years) and then use equity to buy an investment property or the reverse? Buy an investment property in the interim that I can service with my income. Orrrr start a share portfolio?

I’m feeling the opportunity cost of not doing anything right now.
A: Hi AK,

By the questions you’re asking you already sound like you’re on the right track - congratulations.

Firstly, don’t let the opportunity cost worry rush you into doing something too quickly without doing your homework. There will always be other investment opportunities.

It would be great to talk this through with you, to really flesh out your aspirations more than is possible on a forum such as this.

Have you considered buying an investment property in Perth now or very soon given the cash you’ve got saved up? This achieves a few things:
1. Gets you investing

2. Gets you exposure to the Perth property market now, where I assume you intend buying when you eventually move. So if there is a pick up in property prices in the short term you don’t miss out
3. Maybe you can buy something now that you eventually decide to live in, if not sell it and use the equity towards the house you do want to live in

It would be good to talk so I can get an understanding of timeframes etc from there I can help some more.

All the best
James
james.wrigley@firstfinancial.com.au
03 9909 5800
answered
Q: Looking for some general advice in this kind of situation:

- Purchased investment property within a company structure for the purpose of renovation and subdivision to sell on
- Market and personal circumstances have changed and so now the primary purpose of this property is to hold for capital growth (rental income does not cover interest repayments)
- Property is on >800sqm of low density zoned land on the northside of Brisbane and has good long term growth prospects
- Selling at this point would most likely lead to a small loss due to sales costs involved
- Due to the holding structure, the is a small land tax bill every year which would not be an issue if held in my own name
- There is a potential to proceed with original subdivision plan in the distant future (most likely >5 years)

Would it be wise to wait till the capital growth covers these losses and sell the property to break even OR hold on for capital growth in the much longer term, knowing it is in a structure that won't be eligible for the capital gains discount in the future?
A: Hi PJ,

I agree with Brendan's comments. The choice of company structure for such a proposal isn't something I would have initially gone with.

It's just a matter of doing your sums. What do you reasonably expect the growth to deliver? If this covers your costs hold on, if it doesn't then sell.

You need to try and remove emotion from the equation and just look at the numbers. A third party eg. accountant can be very helpful here.

All the best.
James
answered
Q: Interested to get people’s opinion on how the banking royal commission and the stricter lending policies of the banks will have on the housing market in Australia?
A: Hi Peter,

If people can’t borrow as much money as they once could then they can’t pay as much for their next house so I wouldn’t expect it to grow at the same rate in the short term.

I think areas dominated by investors (think suburbs filled with townhouses & apartments) will struggle. Especially as the interest only loans favoured by investors are harder to come by you’ll probably see investors selling as the properties become too hard to hold onto with a P&I loan.

Areas donated by owner occupied families will likely continue along fine. It’s amazing what people will cut from their monthly spend to hold onto the house.

Of course this is all crystal ball gazing but if borrowed money becomes harder to get, prices can’t keep going up at the same rate. Where will the cash come from?

All the best.
James
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Q: I know salary sacrifice cap to Super is $25k per year (incld employer contribut) and up to $100k after tax. I received inheritance - paid off mortgage, and have balance in term deposit atm. Once that money comes off term deposit, is that classed as after tax and can I contribute $10k straight into my super as a one off?
A: Hi Jacqui,

Yes, you can have contribution to your super count for either limit.

You are right there is a $25k limit of salary sacrifice & and employer super contribution. However, you can now also put your own money into super (eg some of the inheritance) and claim this as a tax deduction too - all must be within the $25k cap. There is also paperwork that needs to be lodged with your super fund so be careful.

Otherwise the after tax limit you mention is $100k and your contribution will come under this limit. This is the case if it comes out of the term deposit or not - doesn’t matter.

It’s great you are thinking of topping up your super but it can get a bit tricky with the different limits, age restrictions, should you/shouldn’t you etc. if you need some further help please just each out.

All the best.
James
james.wrigley@firstfinancial.com.au
03 9909 5800
answered
Q: Hello - we are selling our business and will have a couple of hundred thousand to invest. At 51, with little to no super should we put the money into super or invest in managed funds so we can access to funds?

What returns should we set our expectation on managed funds?

Thank you
A: Hi Blair,

You need to take this time slowly, don’t just rush into super, managed funds or anything else.

What’s appropriate for you will depend on your plans for the next few years. You need to work through this before jumping into any type investments.

Given you are selling your business, please ensure you are working closely with your accountant to claim all the exemptions you can. There are a number of small business capital gains tax exemptions you need to be working through.

Regarding returns, how long is a piece of string? Don’t go chasing returns, you’ll just set yourself up for disappointment.

I’d imagine this stage of your life is going to require a level of income to support your lifestyle. Set yourself up around reliable provision of that income, either via super or not.

There’s a lot to work through here & more before you even start worrying about investments.

Happy to help more if you’d like me to.

All the best.

James
james.wrigley@firstfinancial.com.au
03 9909 5800
answered
Q: Hi, 6 months ago I started as a BDM for a print solutions business and finding it really difficult to get to the managers who make the decisions.

Does anyone have a couple tips or ideas I could use, very frustrating?
A: Hi Belinda,

LinkedIn should be your go to.

Start putting out content so people can get to know you. Start connecting with the decision makers.

Best of luck.

James
answered
Q: Hi,

I have a mix of direct shares and managed funds in my super. The return for last year was 15% which was good, but our financial advisers has shared some concerns about the market and the potential for volatility. They’ve made a suggestion to consider a cash out strategy into a diversified portfolio of managed funds. The return may not be as high but there’s less risk. Is this considered a good strategy at this point of time?
A: Hi James,

Just reinforcing some of the earlier comments.

Moving from a portfolio of shares to managed funds is unlikely to be any less risky.

Provided you don’t have a high concentration in a handful of individual stocks then a diversified portfolio of direct stocks will have a similar return profile to that if managed funds. You just won’t see the individual stock returns so you perceive it as being less risky when it actually isn’t.

Set your investment strategy around your goals, rebalance back to that allocation from time to time then just concentrate on the things you can control (taxes, fees, your own contributions etc.).

No one (anyone on here or your existing adviser) has any idea of what’s to come with investment markets.

All the best.
James
james.wrigley@firstfinancial.com.au
03 9909 5800
answered
Q: I have 50K that I want to invest into a managed fund. How do I go about deciding which one ?
A: Hi Santosh,

As Brendan has outlined you should be looking at this from the point of view of ‘what is my purpose’.

Investing for the sake of investing is pointless and not very motivating unless there is some goal in mind. Depending on what that goal is will dictate what your investment should be.

I’m not a believer in the ‘risk tolerance’ approach to investing as you’ll ultimately come out as a ‘balanced investor’ - what does that even mean? All your investing should line up with your goals.

I’m happy to help you work through this but I would be charging for my advice.

Reach out if you want some help.

All the best.
James
james.wrigley@firstfinancial.com.au
03 9909 5800
answered
Q: Hi
I have a 216 Dollars paid default that I got from origin energy in 2016 as I moved my house and didnt find out abt the bill until I got the call from the debt collector and was paid straight away.
My question is, I have my own cleaning business that has gross income of around 90000.
I want to buy a brand new car worth 50 to 60k next year around May or June.
How hard it will be for me to get the car loan if I come up with 10 to 15 k deposit aswell.
Also, how hard will it be for me to get a 1000 or 2000 dollars limit credit card from my bank like right now.
I just dont wanna try if it's going to get rejected as that affects the score, I've been told.
Any help will be appreciated.
Thanks.
Bunny.
A: Hi Bunny,

I’d question the need to spend so much on a car. Is it for use in your business?

I congratulate you on you business, by the sounds of things you’re staring to see some success. However, a car loan is about the worst type of loan you can have & 50-60k on a car when you’re earning 90k is a lot of money.

Perhaps use some of the money you would have spent on the car to grow your business. Get your turnover to 250k+ then look at the car.

Just my two cents.

All the best.
James
video
Ep 9. Is you super super?

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Q: Hi, I am 53 and recently divorced and under financial pressure owing $30k on credit cards. Current superannuation is around $220,000 and would like to ask if I can apply for financial hardship and use some of my super to pay off the cards?
A: Hi Colin,

As above, you'll need to check with your super fund. Some have provisions to allow access under financial hardship, others don't.

Normally the requirements for meeting financial hardship are very strict - credit card debt on it's own is unlikely to satisfy the requirements but you should check with your super fund.

Best of luck.

James
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Q: I have been offered 4.09% fixed for 3 years and the variable rate is 3.69% for a split loan. The 5 year rate would be 4.29%. Would it be better to go for 3 or 5 years?
A: Hi Margot,

Remember, the banks offer fixed rates to give you certainty of your repayments. Not so you can win the interest rate game. The bank will always win the interest rate game if you try to play fixed Vs variable too much.

On the variable loan you'll pay less interest initially (a saving). Assuming rates go up over the next few years you'll likely need the variable rate to go to something like 4.7% or above to be worse off over the 3 year period. In the beginning of the three year period you'll be paying less, towards the end maybe more (than the fixed rate) to end up in a similar position at the end.

Do you think (I don't) rates will go up by 1% plus over the next three years?

Regards
James
answered
Q: Hi all, if a shareholder of an unlisted public company is wanting to sell their shares what information is the company obliged to provide in relation to the financials and performance of the business to allow the shareholder a reasonable chance of selling their shares?
A: Sorry Paul, I have no idea.
answered
Q: Hi

I have quite a bit of equity in a property I purchased through a smsf. Is it possible to refinance the loan, increase the borrowing from 50% to 70% and use the funds as a gift to my kids to help them buy a property?
A: Hi Oliver,

Simple answer is no.

You can can refinance the loan but you can’t increase the debt - one of the quirks of SMSF & propery.

Also, unless you are old enough you won’t be able to get the money out of super. Even if you could increase the debt on the property.

Regards
James
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Q: Hello

My husband and I have just been advised by centrelink that we are not entitled to receive the aged pension because we have too much assets in the form of money, over the $290,000 allowed savings sum. My question is when we live off our savings and deplete it to the allowed savings mount or less, will we then be entitled to receive the full aged pension?

Thank you
Vanessa
A: Hi Vanessa,

This doesn't sound right.

If all you have is cash savings of $290,000 you should be entitled to the full age pension.

If you have assets outside of your family home (think car, caravan, boat, super, cash, household contents etc.) below $844,000 then you are at least entitled to a part age pension. The full age pension is payable on assets below $387,500. Assuming you own your own home.

Happy to have a chat with you over the phone so see if there is some way I can help.

Regards
James
03 9909 5800
james.wrigley@firstfinancial.com.au
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Q: My father passed recently. He had a SMSF where he and my sister were directors of the fund. My sister is also the executor of his will. My sister and I are both nominated 50/50 beneficiaries of the fund. Is my sister able to sell all the shares in the fund and distribute without going to probate? And if so, would this be tax free? Thanks
A: Hi Bruce,

Sorry for your loss.

First thing I will say is please work with your accountant or adviser (whoever was helping your father). You need to work closely through this time as there is a lot of reporting required.

You won’t need to wait for probate as the SMSF is dealt with outside of the usual estate & probate process. But please get support from someone.

Regarding tax, chances are yes some tax will be payable. The calculation of tax payable is somewhat complicated so best to work with the accountant on this.

Please reach out if you require any further help.

Regards
James
03 9909 5800
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Q: So, I am a 57 year old male, one almost-not-dependant daughter and a financially independent partner. I worked overseas for 15 years from the age of 27-42 and so never started a super fund. In 1992 I left a salaried profession and entered the world of tech startups which I continue in today. As a result, I have no salary income and no employer to contribute to a super fund. I rely on sale of a business from time to time. I have put all spare cash into my primary residence as I see it as the most tax effective vehicle available. I have several investment properties overseas and generate enough income that I haven't had to skip a meal yet. My question is whether putting cash into a primary residence is always a better option than a super fund? I find super fund rules are complex and seem to change all the time...whereas cash into my primary residence is tax free and can be released when I retire and downsize which is the moment when I would want to draw down on any super anyway. Thoughts on a postcard please...
A: Hi Geoff,

You are correct that you can sell your house tax free and therefore investing in your house can appear to be a tax free investment. Certainly nothing wrong with that.

What you need to remember is for you to have money to invest in your primary residence you will likely have had to pay tax on income or business sale to have the money to invest in your property in the first place. So an investment in your primary residence can (at worst case) be with income you have already paid 49% tax on.

Alternatively that money directed towards super could be done pre-tax. With tax levied on the super fund at 15% you are already 34% (49-15) better off before you even consider investment performance.

The other thing I’d encourage you to explore, especially if you are selling small businesses, are the concessions involving small business sale and super. You can save HUGE amounts of tax if this is all done correctly.

Summary is, don’t have all your eggs in one basket. Don’t have everything in super & don’t have everything in your house.

Please reach out if I can be of any further assistance.

Regards
James
03 9909 5800
james.wrigley@firstfinancial.com.au
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Q: It is reported 75% of Australians over the age of 65 receive the full or part pension from the Government.

Compulsory superannuation was introduced into Australia in 1992 (26 years ago) for employees to have a percentage (now 9.5%) of their income invested into a superannuation fund to help fund their retirement years. The desired outcome was for people to be self-funded retirees as opposed to being reliant on government pensions.

The superannuation industry is a $2.6 trillion dollar industry with something like $26B of fees paid annually.

If after 26 years, 75% of Aussies over 65% are still reliant on the government it begs the following questions

1. Is the current superannuation policy working?
2. Who is really benefiting from the compulsory superannuation regulations?
3. Should superannuation be compulsory or voluntary?

We’d love to get your thoughts and opinions.
A: Superannuation should remain compulsory but you can’t expect 9.5% of your wages (remember it used to be less than this) to provide you with enough assets to be fully self funded in retirement.

The 9.5% is certainly better than nothing but at that rate most will still be in some form reliant on the age pension. It won’t cover the overseas holidays etc. that most dream of in retirement.

Unfortunately most people pay far to little attention to their superannuation far too late in life. Even just a small addition to what your employer contributes can have a huge impact on your eventual super balance in retirement.
video
How I manage my cash flow

video
My biggest financial mistake

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Q: If I wanted to include derivates as part of an investment strategy what questions do I need to ask my financial planner to know they have the experience and skills?
A: Hi Gus,

Just ask them if they deal with derivatives, you'll probably find most don't (we don't). That type of thing is more likely to come from a stockbroker.

The licencing requirements for a Financial Adviser to offer such advice is very cumbersome so most wont do it. Stockbrokers can operate a little differently so you're more likely to have some luck there.

All the best.

James
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Q: Hi

Going to my first auction tomorrow. Whats people’s thoughts on the best strategy to take. Should we wait until it hits the reserve price before bidding?
A: Hi Rick,

Have a listen to Episode 1 of the Elephant in the room propery podcast. It’s fantastic for understanding all the pieces of the auction performance so you don’t get caught up too much.

Also, set yourself a limit before you attend the auctuon.

Good luck!

James
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Q: Hi, I am 26 and have been with the same company for 5 years and my super is about $25,000. Is that enough to have a financial planner now or should I wait and just use the superfund through work?
A: Hi Abby,

Whilst having an interest in your superannuation at 26 is great, there is much, much, much more a financial adviser can and should be assisting you with if you engage their services at such a young age. If you go to see someone and all they are interested in is your superannuation fund, walk back out the door.

Yes, your superannuation arrangements need to be addressed but you wont be able to touch it for something like another 40 years. Your life will change immensely over this time, the financial adviser needs to work with you through those changes more than be concerned with charging you a fee on your superannuation.

I'd love to help but I know I wouldn't do you justice either. The guys at Experience Wealth have a business that caters solely for people like you. You should reach out to them.

All the best.

James
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Q: Hi,

Just turned 50 and have $450,000 in my super. I want to diversify my investment portfolio and invest some money in a few start-up businesses through crowdfunding. Do I have to set up a SMSF and are there any restrictions on how much I can invest, I have been told no more than 20% of my super balance, is that correct?
A: Hi Stephen,

To have the level of control required to pick and choose what start ups you want to invest in, you’ll need an SMSF.

There is no restriction in the law about how much you can invest in this space. The overarching rule is that you are managing your superannuation benefits with the sole purpose of providing retirement benefits when the time comes.

If you think investing in start ups is the best way of investing your super to provide retirement benefits then you shouldn’t have a problem.

Remember, these types of investments come with incredibly high levels of risk. It’s literally boom or bust, nothing in between & more bust than boom.

Being 50 you’ll likely have 10-15 years at most before you’d be looking to your super to provide you with some type of income. You may not be retired but will likely be looking to draw something from super. So you don’t have a whole lot of time on your side to be taking these types of risks with much of your super - you don’t have the time to recover possible loses.

Deal with a good accountant who can help you set the fund up & keep you on the right side of the compliance requirements. Brendan Curran on here is your go to in that space.

All the best.

James
03 9909 5800
james.wrigley@firstfinancial.com.au
answered
Q: The Reserve Bank of Australia has left the cash rate on hold at 1.5% for a 20th consecutive meeting.
A: Not showing any signs of moving any time soon
video
Tips for managing the move to residential aged care - James Wrigley

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Q: Question on behalf of my mum, she is 78 and still very active. She is looking at buying a house and land package near Goulburn for $450,000 as an investment. Mum owns her own home valued at $1.2M and an investment property valued at $1.6M and she lives off her super. Apart from the super she has around $200k in savings and would use $150,000 to purchase the property. With a strong net asset position would she be able to get a loan of $300K and what lenders would look at a loan like this?
A: Hi Jack,

Sounds like your mum is in a sound financial position. Continuing with what Todd has discussed I'd encourage you think about the purpose of making this investment:

- Is it buying something for the sake of just buying something? From what you have described it doesn't sound like your mum needs the risk (buying any type of investment involves a level of risk) for the hope of having more money later on

- Is it your mum's intention that you or any brothers/sisters take over the property (ie is she buying an investment now that is ultimately intended for?) If this is the case you should work through the estate planning implications, perhaps your mum buying it in her name may not be the best outcome

Regardless of the intention, the banks will want to understand how this loan is going to be paid back. You will need to be able to build a case for the exit strategy - given your mum's age this may be easier said than done. I'll leave it for the mortgage brokers on here to help with if borrowing is even possible.

All the best.
James
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Q: Hi,
I am 48, single, no kids and been working for the same company for 15 years. I recently set up my own SMSF with $320,000 and would like to get some advice on what people think is the best long term strategy, purchasing a residential property, buying shares or managed funds. Can you buy an apartment with SMSF or does it have to be house with land?
A: Hi Eliza,

As Brendan has said your super needs to be looked at in terms of your overall planning. You can likely afford to take on a little more risk with your super investments given your age and other info you have provided. But this isn’t something that can be addressed in isolation.

I’d also be keen to understand why you established the SMSF, this may go some way towards helping develop an appropriate strategy for you.

I’d be happy to discuss options with you. Phone/Skype/facetime/in person (I’m Melb CBD based) are all good for me.

Please reach out if you’d like some assistance.

Regards
James
james.wrigley@firstfinancial.com.au
03 9909 5800
answered
Q: Hello, a mate prompted me to check our home loan rate with ANZ - 4.49%, the loan is $780,000.

If I call them on Monday to ask about the rate what would be a reasonable expectation for them to reduce the rate by?
A: Hi David,

I’m with ANZ paying principal & interest and on 3.79%. That should give you an idea of where they should be dropping it to.

If you are paying interest only then your rate seems about right.

Good luck.
James
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Q: What would be considered an ideal mix between shares and property when developing an investment portfolio?
A: Hi Jerry,

That's impossible to answer on a forum such as this.

Each have different characteristics so depending on what you need from your investments the answer will be different for everyone.

Best you talk to an accountant or financial planner who can help you work through what might be most appropriate for you.

Regards
James
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Q: I am looking at opening an SMSF but I am not experienced in this area. What should I be careful of when approaching a Financial Planner (ie. questions I should ask), amid the media coverage of the Royal Commission?
I am not interested in taking on products that the Financial Planner might offer. I want financial investment advice and I also want the Financial Planner to manage the SMSF as I have compliance concerns if I were to do it, myself. Thank you in advance.
A: Hi Julie,

First thing you need to be addressing (and what I would want to know if I was advising you) with the Finacial Adviser is why you want an SMSF in the first place?

They can be very powerful structires if used correctly. They can also be a huge headache and very costly expense if not.

First and for most a financial adviser’s job is to work through, with you, what your priorities are then help you map out some way of achieving them. If an SMSF in some way helps this then great, if it adds unnecessary complexity then maybe some other super fund may be a better option for you.

Once the strategy piece has been taken care of then it turns to investments. Some financial advisers will do both the strategy & the investments, some will only do one part.

Paying for invest and compliance work won’t likely be cheap but you need to ask what they charge.

Just have a conversation with a few, you’ll soon realise who you do and don’t like.

Best of luck.

James
james.wrigley@firstfinancial.com.au
03 9909 5800
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Q: Hi, I purchased an investment property off the plan in 2015 and now have to sell it and it has been sold for $50,000 less than I paid. The property was in my name so if we settle on the sale before 30 June is it possible to offset the loss against my personal income for the year?
A: Hi Will,

Sorry to hear you are selling at a loss - same thing happened to me a few years back.

The loss is a ‘capital loss’ and can only be used to offset capital gains. If you’ve had any capital gains this year you can use the loss. Otherwise the loss will carry forward to future tax years where you can use it to offset a gain in future years.

Regards
James
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Q: What is the one thing, your major priority, you would do to help ease housing affordability in Australia?
A: We need to get over this idea of home ownership as the Australian dream. Put in place a system where long term renting of the one house is possible (I'm talking 20-30 years plus) then more and more people will be comfortable with the idea of renting.

I'm seeing many of my younger clients happy to rent where they want to live at that point in time and then invest elsewhere. With it being so common for people to change jobs every few years, work in different states & overseas - buying a house to live in often stops them from taking up amazing opportunities.

Renting isn't a bad financial decision. It only becomes a problem if you spend all the rest of the money you earn.

If you set yourself up so that some investing is done automatically and at regular (say monthly) intervals for a long period of time (20 years plus) then there is no reason why renting long term can't be a viable and much more flexible option.
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Q: I am 52 still working can use my part superannuation to pay down my mortgage ?
A: Hi Colin,

As Glenn has said, unfortunately you'll have to wait a few more years until you can access your super.

The only exception would be if you could satisfy financial hardship (you'll need to talk to your super fund for that). If going down the financial hardship route, tread very carefully.

Regards
James
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Q: Where is the best place at the moment to buy an investment property for around $600.000?
A: Hi Pascal,

You should to the team at Performance Property - they will be able to help you.

It’s likely they will tell you there is much better value to be had in states outside of Victoria.

Regards
James
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Q: What do people recommend as a starting point to set up a SMSF... I understand there is a fair bit of work involved so would $200,000 be worth it?
A: Brendan is 100% on the money here.

There are many reasons why you may set up an SMSF with less than $200k. Control of your money and complicated estate planning together with insurance arrangements are one.

To set it up and put your money in bank shares - there are far cheaper and less complicated options.

Talk it through with an adviser who has SMSF experience and they’ll give you an answer.

All the best.

James
03 9909 5800
james.wrigley@firstfinancial.com.au
answered
Q: I have been running my own engineering business for 5 years and nearly 50. I have life insurance but a few people have suggested I should really be looking at business and income protection. I would like to get some advice on the insurance options I should look at?
A: Hi Matthew,

I agree with everything that had already been said.

Life insurance is typically the cheapest of the personal insurances because statistically it’s the least like one you’ll actually claim on.

Your not alone in just having life insurance - plenty of people do. But especially running your own business, an extended period off work without an income could derail your personal finances as well as cause the business to fall apart around you.

Best to talk through your options with a financial adviser who can make some recommendations for your situation.

Happy to chat on the phone if you like.

Regards
James
03 9909 5800
james.wrigley@firstfinancial.com.au
answered
Q: Hi , I'm looking for some advice on the following.
I'm 50 , working full time , married. We have combined super of 330k , 200k savings , A mortgage of 250k. The house is valued at 550k.
My goal is to pay of my home and live comfortably into retirement. Should I put the 200k onto the mortgage , or into my super, or invest it to gain more growth?
On top of that Im looking at having a career break for 12 months.This would be unpaid.Any help would be great.
A: Hi Paul,

Very difficult one to answer on a forum such as this.

There’s an argument to be made for investing the $200k (if you think you can earn more than the interest rate on your mortgage). Just as there is a more conservative argument for using the money to pay down your mortgage.

What is appropriate for you will be determined by your appetite for risk.

Living comfortable in retirement means very different things to different people, so you’d need to work through what this actually means for you. Just as you’d need to give some thought as to how much longer you want to work for - 5, 10, 15 years or more? This will greatly impact your planning options and ultimately what retirement may look like for you.

The final thing I would caution is the career break. If your employer supports this type of thing and will keep a job for you - go for it. If you need to quit your current job then try and find something to go back to later - you might find getting employment again difficult. This all needs to be built into your retirement planning.

Please reach out if I can be of any more assistance.

Regards
James
03 9909 5800
james.wrigley@firstfinancial.com.au
answered
Q: Looking to buy a block of land in Nelson Bay and build in 5 years for our retirement. Price $450,000. Can we use SMSF to buy and how much could we borrow? We do want to live in the property when we retire in 10 years?
A: Hi Angie,

We need to talk this through to work it in with your retirement plans.

Can you buy land in your SMSF? Yes
Can you buy it with borrowed money? Probably not, the bank won’t lend
Can you build a property in your SMSF? Yes. Provided there are no borrowings involved.

I have clients who have purchased their retirement homes in their SMSF now. As Scott & Sam have mentioned you can’t live in the property whilst it’s owned by the SMSF - you need to move it out.

It’s all very complicated but possible. You need to sit down with an adviser who can help you step you through it all. You should expect to pay fees for this advice.

Regards
James
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Q: I would like to ask if there is a way to keep track of how our super performs including the fees online … like we can with our home loan?
A: Hi Rick,

You should be able to get online access to your super fund.

It’s not something you’ll need to go through your adviser for, unless you have an SMSF.

All of my clients who aren’t in an SMSF have online access to check balance, performance, fees and a whole lot of other things whenever they want.

I also meet most of them face to face 2 or 3 times a year so what they see online is never a surprise (good or bad surprise).

Start by calling your super fund directly.

Regards
James
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Q: Wife and I in our mid 50’ss with not much super. Looking to downsize from a family home worth about $1.6M into an apartment block, Purchase price $950K including costs. We are both still enjoying working so should we look to place the funds into a managed fund where we can get access or our super? thanks
A: Hi Marcus,

Depending how far into your mid 50’s you may be able to access your super now - or at least be very close to it.

I’d encourage you to sit down with a financial adviser who can help you work through what is right for you.

If you don’t have much super now, you’ll obviously need to be thinking of how you are going to support yourself in retirement. A debt free house is the usual starting point, but over and above that what lifestyle do you want to lead?

Super may not be the right thing for you now but likely will in time due to the tax breaks available, this should be in your plans.

I’m happy to discuss further with you if you’d like. I’ve got clients all over the country and we use phone/email/Skype to communicate.

All the best.

James
james.wrigley@firstfinancial.com.au
03 9909 5800
answered
Q: Parents have been running the family business for 20 years and now ready to retire. We have tried the sell the business ourselves but now believe we need a specialist, does anyone know of a good business broker?
A: Hi Tony,

I can’t help you with the business broker but PLEASE, PLEASE, PLEASE work closely with your parents accountant through this process.

There are some very valuable tax concessions available upon retirement when selling a business. You need to apply them in the right order and get the right advice - the outcome can be very valuable.

All the best.
James
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Q: We have come into some money from a family inheritance. If we pay $100,000 on our home loan will it automatically reduce our monthly repayments?
A: Hi Irene,

No it won’t reduce your repayments it will just reduce how much interest you pay each month.

Your monthly payments are made up of part interest and part principal repayment. This minimum repayment is set based on your interest rate and the term of your loan (eg 30 years). Over time your monthly repayments slowly become less interest and more principal repayment but the same dollar amount.

By making the lump sum payment your monthly repayments will be less interest & more principal. Which means you pay your loan off sooner.

Having said all of this, you may be able to ask your bank to recalculate your minimum payment - taking into the lump sum. Or you could refinance (will likely incur some fees) to reduce your monthly payment.

Regards
James
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Q: Are there any good stockbroking software to assist in buying and selling shares on the stockmarket?
A: Hi Steven,

If it’s just the buying or selling of shares you want (execution of your trades) any of the online brokers can do this very easily & cheaply. Things like etrade or commsec are examples.

If it’s research to help you decide what to buy or sell there are many providers of this. The above named online brokers have research and stock ideas you can look at or there are many subscription services you can use.

Just try googling online share trading if that’s what you are after and compare how much each broker charges to execute a trade.

Best of luck.

Regards
James
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Q: My husband and I are down to one income and would like to take some pressure off our home loan by selling an investment property. It was purchased using SMSF. We are hoping to use the equity to pay down the loan but not sure if we can?
A: Hi Helen,

As Brendan has said. The propery in the SMSF is an asset of the SMSF. You can sell it to pay down any loan in the SMSF but unless you are 57 or older you will struggle to be allowed to access any money that is in the SMSF.

Sounds like a bit of a tough situation you are in. Im more than happy to talk to you over the phone initially to see if there is any way I can help.

I’ve got plenty of experience with SMSF & propery sp if there’s a way out of the situation I’ll be able to help.

Regards
James
03 9909 5800
James.wrigley@firstfinancial.com.au
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Q: What is the best superfund that has the lowest fees and best returns?
A: Hi Steven,

I would NOT suggest you set up a self managed super fund like Allan has suggested, unless you have the time & experience to manage it. If you don’t, you’d have to pay someone to do it (like me as a financial adviser) and I can tell you 100% it will not be the cheapest option for you. That is unless you had multiple million dollars in there.

If you are chasing low fees, something like an industry super fund (HESTA, CBUS, HostPlus etc.) will likely be your cheapest options. Regarding performance they will all have different investment options you can choose from, that will have all performed differently at different points in time. For instance the last 5 years or so have been great for investment markets so the high growth investment options will have had amazing performance. If you were in these options during the GFC though the performance will have been terrible.

Rather than chasing low fees & high performance. You should approach this as “what do I need from my super at this stage of my life?”. If you are retired and starting to live off your super, income is likely your main priority. If you are working at still have 20+ years to retirement, growth in your investments will likely be the priority.

You should be selecting a super fund and investment option that suits you and your stage of life.

If you don’t feel you can do this on your own. Speak to a financial adviser who can assist you make an appropriate decision.

We aren’t all crooks like the Royal Commission would have you believe.

All the best.

James
03 9909 5800
james.wrigley@firstfinancial.com.au
video
Ep 5 - First Home Super Saver Scheme

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Q: Hi, sadly two family members are laying claims to items that weren’t identified in a will. Is it up to them to sort it out, can others in the family get involved or should it just be left to the executor to make a decision?
A: Hi Cynthia,

I believe it's up to the executor to sort it out. Perhaps legal assistance may be needed. The lat thing the executor would want is to be sued by the two feuding parties because someone thinks the executor didn't fulfill their duties correctly.

Regards
James
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Q: We like the idea of having some of our home loan fixed ... we have been offered 3.56% variable but the 3-year rate is 3.99%. If there is no likelihood of rates moving then should we just choose the variable rate?
A: Hi Georgie,

I wouldn’t expect rates to go up any time soon. However over the next three years probably very likely.

Say rates stayed where they are for the next year, then went up. The variable rate would need to get up to about 4.5% over the next two years for you to be worse of than if you fixed for 3 years.

Banks don’t offer fixed rates so you can win the interest rate game. They offer them to give you certainty of repayment for a period of time and so they can win the interest rate game.

All the best.

James.
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Q: Hello, I am 59 and want to start planning for my retirement. I would like to get some feedback in relation to the proposed changes to superannuation if the Labour government wins the next election. I have $400,000 in super and now quite nervous about how it might affect my retirement plans. Can someone provide some advice?
A: Hi Julie,

It’s great that you’re starting to plan for retirement. Too many people don’t, they just retire and hope for the best.

Labour has proposed to abolish the refund of excess framing credits, for those that aren’t on the age pension.

Franking credits are tax paid by companies on any profits they make, before paying dividends to you. It’s a way of avoiding double taxation.

What the retirees are so upset about is this refund was extra income on their investments (likely through their super) that they lived on. So for a retiree to keep drawing the same income under these proposed rules, as they did previously they will need to draw on more of their capital - which in turn will see their capital base run down faster, making them eligible for an age pension sooner.

At this stage it’s just proposal so I wouldn’t worry too much. In all likelihood there will be many changes to the retirement/super/pension system over the next 30 years you need to be planning for. You just need to be able to adjust to the changes when they occur.

Please let me know if I can help any further.

Regards
James
James.wrigley@firstfinancial.com.au
03 9909 5800
video
SMSF Diaries Ep4 - superannuation downsizing rules

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Q: I have just set up my own business, what’s the best way to choose a superannuation fund. What questions do I need to ask?
A: Hi Ingrid,

Do you have an existing super fund? I’d start there if you do.

Otherwise look for something that is low cost, all super funds advertise their fees on their website. Then looks at the past performance of the investments.

As they always say past performance is no indication of future performance but you don’t have much else to compare them on.

If you’re just starting out with superannuation it’s unlikely you’ll anything more complicated than one of the big retail superannuation funds. Later down the track an SMSF together with your own business can be a very powerful combination if used correctly.

All the best.
James
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Q: I am 54 and my super is about $220,000. I own my home and have an investment property in Bathurst worth about $200,000.

There has been very little capital gain as it needs a bit of work.

I want to retire at 60…. should I sell Bathurst and put it all into my super?
A: Hi Phillip,

As per Brendan’s comment it’s impossoble to answer that question given the little information you’ve provided.

It would normally take me an hour or more of discussion with you in an initial meeting to start deciphering what may be best for your circumstances.

Please pay for good advice. You need an accountant and Fiancial Adviser working together for your best outcome.

Happy to chat over the phone if you need some help.

Regards
James
03 9909 5800
James.wrigley@firstfinancial.com.au
video
SMSF & Crypto

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Q: My wife and I are quite risk adverse when it comes to investing. We are about to receive a sizeable inheritance of about $700,000 and want to ask if we should buy an investment property or put the money into super as we’re in our early 50’s and both still working?
A: Hi Rick,

Brendan, Glenn & myself typically have the same kind of response to questions such as yours when they get posted on here.

There’s not much more I can add that hasn’t been said already other than to emphasise the importance of getting in front of someone who can help you map out the coming years and avoid making silly mistakes with such a sizeable amount of money.

I’m a financial adviser based on the Melbourne CBD. Happy to chat over the phone initially or meet in person.

You can call me on 9909 5800 or email james.wrigley@firstfinancial.com.au

Best of luck.
Regards
James
video
SMSF Diaries Episode 2: SMSF & property gone bad

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Q: Any feedback would be greatly appreciated. There was a mobile speeding camera that was attached to the car and it was at night time that I went past it at the opposite direction. Now, my question is, because I was going opposite direction, and their was a very island in the middle of the road with big trees that was separating the road, do you think the speeding camera would of caught me if I was speeding (considering there was a long island in the middle of the road with trees in the way)?
A: My guess is no. I’d say the camera was set up to get people going the other way.

Not that there’s any excuse for speeding though.
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Q: We are looking at retirement village options for our parents and wanted to know if stamp duty is payable at any time, thank you?
A: Hi David,

The one thing I can’t stress enough to you is make sure you are aware (and comfortable) with the exit fees they charge.

Remember your parents a buying a lifestyle asset, not an investment when moving into a retirement village. It is quite common to see exit fees of 30% of the sale price when the retirement village is eventually sold (either your parents want to move elsewhere or you are selling as an estate asset). More often than not after exit fees and refurbishment cost is taken into account there is no more money left after sale than the original purchase price (and in some cases a whole lot less).

Retirement villages are a fantastic option from a lifestyle point of view but I encourage all my clients to fully understand the exit fees & make sure their kids and other loved ones know too.

All the best.

James
video
SMSF Diaries Episode 1

video
Why maximising your super contributions might not be enough

video
James Wrigley - Financial Planner First Financial Client Update February 2018

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Q: A friend suggested I invest my cash savings into my own SMSF to help with the purchase of an investment property? Is this wise and how can I get my cash back?
A: Hi Lucia,

I’m with Glenn there’s a million questions to ask to determine if this is a sensible idea or not.

There is actually a way you can use your cash to purchase and have it paid back to you over time - but it’s complicated.

Start with a conversation with a financial adviser to work through of this is appropriate for you or not.

Regards
James
answered
Q: My husband and I are looking to purchase a property with my parents in a discretionary trust we had set up 12 months ago. Are we able to add my parents to an established trust and is it easy to be able to obtain finance under this structure?
A: Hi Martina,

When you say 'add your parents to your established trust'. Do you mean add them as beneficiary of the trust or as trustee and part controller of the trust?

Either way the answer is likely to be yes - the trust deed for your trust will spell out what you can and can't do.

As Todd suggests you should be sitting down with an accountant to work through this, reach out to Brendan Curran on this platform. You'll need to be careful if changing the control of the trust, you could lose any tax concessions already built up in the trust (if there are any).

You should also work through the pros & cons of buying through the trust & the resultant impact on your estate planning. When buying assets in a trust, they aren't your assets to be disposed of in your estate. All you can dispose of in your estate is your control to manage the trust - so if you are wanting to leave money/assets to children for example, this may not occur unless addressed appropriately in your will.

Regards
James
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Q: Listening to Ben Fordham on 2GB yesterday about issues parents are having with their children and the NDIS got me thinking about insurance options for my children. I’m not talking about the families private health insurance but other insurances like disability or trauma. Are they within the blanket policies of parents, what options are available?
A: Hi Margaret,

As Glenn mentions child trauma policies are what we typically recommend.

There are some retail life, TPD, trauma policies that have included benefits should something happen to your child - typically these are quite small amounts of insurance in the order of $15,000 or so.

There are a number of different options available from the major insurance companies.

Regards
James
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Q: I’ve recently been medically retired at 52 years of age and due to illness likely to be successful in TPD claim through my industry super and therefore also gain access to my superannuation. Wondering what is the tax rate on super componnent? As I need $ to live thinking investing in property or stock market may be a preferred option to rolling over. I haven’t applied for Centrelink - single and currently surviving on limited but declining savings. Thanks J
A: Hi Jen,

Sorry to hear of your health.

You should get in front of an experienced financial adviser as there’s a few moving parts to get the best tax outcome for a TPD claim.

I’d then encourage you to consider using the super system as your vehicle for investing into the share or property markets to provide you an income.

Regards
James
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Q: Hello.

I'm not sure if I should be worried about my investments at the moment, SUPER & INVESTMENT ACCOUNT with what happened last week in the US? Theres been a few thousand wiped from the balance being in INTERNATIONAL SHARES and a few other things.

I've seen articles saying the worse is yet to come .. or is it just the media fear mongering .. should i switch everything to cash or something less risky .. or am i falling into the trap ?

Whats your opinion ?

Thanks,

J.
A: Hi J,

Lots of questions going round in my head. There could be worse to come & there could not be - no one will can tell you with any certainty.

What's important is that you are invested appropriately for your age, your needs from your investments & where you are at financially.

I uploaded the following to YouTube for my clients early last week, you might find it of interest.

https://youtu.be/SAiHKO8HzdM

Regards
James
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Q: I’m 28 and would really like to understand more about superannuation and building for the future. Am I better off just going along with my employers super or finding a financial planner to help. What questions should I be asking a planner, thanks?
A: Hi Kris,

I second what Brendan has already said, fantastic that you are already thinking about this.

Superannuation can be an incredibly powerful structure to help you build significant assets over an extended period of time. The sooner you exploit it's benefits (provided you can afford to) the better off you'll be in the long run.

I'm happy to talk to you over the phone to help you understand the in's and out's of super if that's what you're looking for at this stage. Depending on where that conversation goes we can work out if you need advice or not.

Regards
James

Senior Adviser
First Financial
03 9909 5800
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Q: My family is about to receive a bequeathment of approx $200K in fully franked shares.
Our house is would be approx valued at 1.1m on the open market and our outsatnding mortgage is $440k.
My personal super is only $50 plus thousand and my wifes approximately $100k
I am 60 years old my wife 55
We plan to firstly cash in shares to repay immediate debt of approx $25k.
Is my (our super) worth topping up at the max $35k each?
Should we keep any shares as is or cash in total to reinvest?
A: Hi Richard,

This can go may different ways, you should sit down with someone who can talk you through the pros and cons of each way.

There's the options you mention:
1. Keeping the shares
2. Selling to cash (you'll need to watch the tax implications of this as you could be stuck with tax on any gains earned by the previous owner of the shares)
3. Topping up super (the annual cap for the type of contribution you'd likely be making is actually $100,000 each. The $35,000 you mention was last financial years tax deductible contribution limit - this is now only $25,000).

There's also another strategy you could explore which involves cashing in and living off the shares for as long as that would support you and directing as much of your pre-tax salary to super for the next couple of years. This would save you lots in tax whilst building your super for retirement.

The other thing that stands out to me is your mortgage. Best if you had some type of plan around paying that off prior to retirement - the inheritance would wipe out almost half of what you owe, saving you lots of interest.

What's best for you would take some exploring & may not be easy to answer via an online forum such as this.

Regards
James

Senior Adviser
First Financial 03 9909 5800
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Q: I am running the business my father founded and wanted to ask about protecting the family should his health deteriorates. Dad is 74 and reluctant to formally hand over control but we want to put things in place to ensure everyone is happy. What is the best way we can achieve this?
A: Hi Nick,

As Brendan said you need to get yourself in front of an experienced accountant and estate planning lawyer ASAP.

You really need to get this sorted ASAP all too often it doesn’t and families and businesss end up in ruins as a result.

Regards
James
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Q: Hello, we sold everything (house, etc) 4 years ago and have been living in a caravan, touring and working around Australia, henceforth the caravan is our home. We would like to upgrade to a newer model and I would like to know if we're eligible for a home loan to do this? Thank you. Kind regards, Lea Hickmott.
A: Hi Hickmott,

You’d get a personal loan, not a home loan for the purchase.

Regards
James
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Q: Hi.

My partner and I bought our first property 5 months ago. Now I need to relocate interstate for a 2 year assignment. I am looking at renting it or selling it. What is the best way to go about it?

Thanks
Jason
A: Hi Jason,

I'll say it depends.

Depends on:
1. What you plan to do with the money if you sell? Remember selling and buying property is costly so not something you want to do very often.
2. What do you think the growth prospects are for the property you have bought over the next couple of years?
3. What are your living arrangements going to be whilst on assignment?

For 2 years I'd generally say just keep it and rent it out. Get yourself in front of a good accountant to make sure you have yourself set up to be able to claim the most deductions possible on your property.

All the best.
James
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Q: What are the tax rules around gifting a large sum of money? Eg. $200k
A: Hi Justin,

There’s is no tax on gifting itself.

You may encounter capital gains tax if you gift an asset that is worth more now than when you bought it. Or if you sell an asset down to cash to gift the cash.

Regards
James
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Q: I am 62 and looking at retiring in the next few years. I'm finding it really hard to get simple questions answered about my superannuation, tax, etc. My needs are simple - no assets (except Super), no debt and I'm not interested in investing outside super - I need financial advice but hate being 'schmoozed' - slick powerpoint presentations, glossy folders, expensive service, etc. I want simple straightforward financial advice. Where can I get it in Melbourne?
A: Hi Jenni,

I can help, I’m in Melbourne.

No glossy brochures, no Power Point presentations. I’ll likely use the whiteboard with a marker to help explain some things.

I can provide you with one off advice to answer all your questions or advice on an ongoing basis if it’s necessary - would need to understand where you are at and what you are looking for.

Happy to meet with you in the coming weeks of you would like.

You can email me at james.wrigley@firstfinancial.com.au or call me direct on 03 9909 5826.

Hopefully hear from you.

Thanks
James
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Q: I’m 39 yers old and have applied and been granted total permanent disability insurance payout from my super fund.
I would like to know how much I will get taxed if I withdraw in 1 lump sum. This amount is sitting in my super account ATM as a taxed amount? Does this amount of I withdraw get put down as table income at tax time
A: Hi Wayne,

I’ve helped someone previously from this forum understand what’s involved.

There’s quite a complicated calculation to determine what your taxable amount is versus your tax free - not something that can easily be answered on here.

There are also a couple of ‘tricks’ to lock in a higher tax free amount. It may or may not be too late for that.

Best you seek advice from an experienced financial adviser to help you through. There are a couple of us who post regularly on here who would be able to help.

Regards
James
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Q: We invested a small sum of our Super ($30,000) in units in a property investment company, which did well until a change in management. Last year apparently our units were sold on to a new company, which forwarded a statement showing our holdings now to be zero. Our emails show no notification of any transfer plan, and no option to opt-out and withdraw remaining funds. Also there is no final payment made to our bank account, as claimed. Can we do anything about this, and if so who do we approach?
A: Hi Patricia,

I would start by trying to get some type of explanation from the company that has issued you the zero balance statement. They will have some form of complaints handeling procedure.

It’s quite likely that the property investment company may have gone broke. What assets they did have remaining were sold to repay some of their debts, leaving nothing for investors like yourself. Unfortunately this is all too common.

If no luck from the company direct you should raise your concerns with ASIC.

Good luck.

James
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Q: I am approaching retirement (60 yrs old ) and would like to relocate on retirement. Is it an option to sell my home now (240,000 mortgage, house worth 350,000 ) invest the profit in my super and draw on retirement to purchase a home in the relocation choice ?
A: Hi Greg,

Yes, that is certainly possible.

You should seek advice just to make sure you aren’t missing out on anything extra that you may be entitled too.

Regards
James
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Q: Hello.
I am looking for some advice. My mother has passed away. She had a half share in a house with my brother. (Tennant's in common). My brother had a mortgage on his half . my brother used my mother as a guarantor for his loan/ mortgage on his half. My mother owned her half. Now my mother has passed away he is saying that he wants half of my mothers estate because she was his guarantor for his mortgage? Any advice would be helpfu l. Thank u
A: Hi Greg,

I borrowed money to buy my house, I have a debt to the bank but it’s still my house.

How your brother paid for his half of the house has nothing to do with it. If he owns half of the house with a debt against it, it’s still his half of the house. The issue of your mother being guarantor is an issue between your bother and the bank - the bank may look to amend the terms of the loan now that your mother is no longer here to be guarantor but it doesn’t mean your brother doesn’t own his half of the house.

Your mother owned half of the house. If her will says her estate is to be split evenly between yourself and your bother, your brother is entitled to half of her share of the house.

Sorry to be the one telling you what you don’t want to hear.

If you believe otherwise, employ a good lawyer to fight for you.

Regards
James
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Q: I am aware that super funds can be accessed early, however if the lump sum is moved to your self-managed super fun, does it get taxed? or if you are to withdraw your super due to 'x,y or z" reason would it be taxed?
Thank you.
A: Hi Dee,

You can only access your super early due to financial hardship, which is quite hard to substantiate. If you are taking money out of the super system under the age of 60 it’s likely you’ll have to pay some tax.

If you are moving super from super fund 1 to super fund 2, you can do this at any age. This is not early access, it’s called a rollover. When your super is sold down to cash in super fund 1, it may incur a tax liability. When that money is moved across to super fund 2 there is no tax to pay.

If the money stays in the super system you will not pay tax personally on future earnings, it will be payable by your super fund.

If I can help further with what you are trying to do please reach out james.wrigley@firstfinancial.com.au

Regards
James
answered
Q: Hello.
I am looking for some advice. My mother has passed away. She had a half share in a house with my brother. (Tennant's in common). My brother had a mortgage on his half . my brother used my mother as a guarantor for his loan/ mortgage on his half. My mother owned her half. Now my mother has passed away he is saying that he wants half of my mothers estate because she was his guarantor for his mortgage? Any advice would be helpfu l. Thank u
A: Hi Greg,

From the looks of what you have said I’d say your brother is entitled to the half of the house that he owned (it was his anway) as well as half of whatever else your mother owned.

When it comes to the house that means he gets half of your mother’s interst in the house, on top of the half he already owned. So in the end your brother would own 75% of the house.

Again, I’d encourage you to be speaking to a lawyer.

Regards
James
answered
Q: Hello.
I am looking for some advice. My mother has passed away. She had a half share in a house with my brother. (Tennant's in common). My brother had a mortgage on his half . my brother used my mother as a guarantor for his loan/ mortgage on his half. My mother owned her half. Now my mother has passed away he is saying that he wants half of my mothers estate because she was his guarantor for his mortgage? Any advice would be helpfu l. Thank u
A: Hi Greg,

What did her Will say? This will outline what your mother intended for her estate.

If no Will, there are laws in each state for what the distribution of her estate is to be.

It’s not something that you or your bother can just decide by yourselves.

You should be speaking to a lawyer to help you through the estate process.

Regards
James
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Q: Can I use superannuation to purchase farm property?
A: Hi Brad,

Yes, under the right circumstances.

What are you intentions for the farm property would be my question back to you?

There are may successful farming families that own their properties via a self managed super fund - funnily enough I was just taking to Brendan Curran an accountant who contributes a lot to this forum on this very topic earlier today.

Best you seek professional financial & accounting advice to get it set up properly if this is something you are looking into seriously. The correct help can quite seriously keep you out of prison if you got things wrong.

Reach out if you need some help. You can contact me via email at james.wrigley@firstfinancial.com.au or 03 9909 5826.

Regards
James
answered
Q: Im interested in bitcoin starting it up soon but i want to know the tax's involved. As far as i e heard there is no tax on the coin itself in australia but something about capital gains? please explain
A: Hi Michael,

If you sell your Bitcoin at a profit there is capital gains tax payable, just as there is for the sale of any other asset.

I read this morning the ATO has set up a special taskforce for this so you’ll want to be careful you are reporting any gains in your tax return.

I’d be using the services of a good accountant if I was you.

Regards
James
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Q: We're looking for a good financial advisor to help sort our finances so it works best for us as we move into retirement. My husband is 60yrs (semi retired) and I'm 55yrs (working). We own our own home, have 4 investment properties (2 in NSW and 2 in SA) plus another property overseas. We have $650,000 in a savings acc earning minimum return and we need this to be properly invested. I have $160k super in a industry fund plus we have our own SMSF with $35k. Any recommendations?
A: Hi Tracey,

Sounds like you have a lot going on.

I’d me more than happy to help you sort out your finances to put you in the best position for retirement.

I am based in Melbourne but have clients right across the country. The beauty of the phone, internet, email & Skype means we are never really too far away.

Happy to have a chat with you over the phone initially to get an understanding of how I may be able to help.

You can request I contact you through here or email me at james.wrigley@firstfinancial.com.au phone 03 9909 5826.

Hope to be able to help.

Regards
James
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Q: Looking at buying into a retirement property and renting my house out. Will this be classified as a investment property as we will be putting my husbands name only on the retirement property as the house is in my name only. Nothing is owed on my house. We live in NSW.?
A: Hi Ros,

If Centrelink (eg age pension) is your worry they will count your old house (the one you intend to rent out) as an investment asset regardless if it is rented out our not - it will impact your asset test assessment.

If you rent the house out the income will count towards the income test.

Regardless if one house is in your name and one in your husband’s, Centrelink count your total assets a couple.

Best you seek some advice so you don’t inadvertently end up in a worse position than you should be.

Regards
James
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Q: I need to utiilise my superannuation fund to buy a home. I am 59 years old and understand I can somehow apply for a early release. Would there be someone who could guide me?
A: Hi James,

Following from your comment to me.

You can access an amount of ‘taxable’ super under the age of 60 of $195,000 via a lump sum from super (so you would need to not be working for this option to apply). You can access this money tax free.

Again, best to check with your super fund to see what you can and can’t access.

The financial hardship provisions (which is what you may likely be trying to access your super for early release) are difficult to prove - each super fund has their own set of rules. Some super funds don’t even allow it (it’s not in their rules).

If you’re in need of my assistance you can email me at james.wrigley@firstfinancial.com.au and we can take it from there.

Regards
James
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Q: I need to utiilise my superannuation fund to buy a home. I am 59 years old and understand I can somehow apply for a early release. Would there be someone who could guide me?
A: Hi James,

At age 59 you have reached what’s called your preservation age, so you can access your super. The form in which you can access your super depends on if you are working or not.

If you are working - you’ll likely only be able to access your super via a ‘pension’ capped at 10% of your super balance each year.

If you are not working - you will likely be able to cash in the whole balance.

Either way tax will be payable.

Talk to your super fund about your options & the tax implications of each.

All the best.

James
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Q: Hi, same question as last year. The RBA hasn't made any changes for 12 months or more so do people expect there to be some movement in 2018 and is now a good time to consider fixed rate options?
A: Hi Jacob,

Lots of commentary around along the lines of ‘will there be a movement next year’ not much ‘when there will be one next year’.

I’m of the view that we aren’t going to see rates move any time soon. When the time comes that rates do move it’s going to be a long slow process of moving them up.

Household debt is so high at the moment that any sudden large movements up in interest rates would cripple the economy.

Reach out to one of the mortgage brokers on here to find out where fixed rates are currently at.

Regards
James
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Q: I’ve recently started my own business after being made redundant and looking for insurance advice. We have a rather large mortgage so I’d like to understand the options available for income protection, trauma or accident – is one more important than the other?
A: Hi Gary,

I can assist with helping you determine what types of insurance are most appropriate for your circumstances & then appropriate levels of cover from there.

This isn’t something that can be easily answered on a forum like this as everyone’s needs are different. Best if we spoke over the phone/met in pension/ held a Skype call.

Please reach out if you would like my help.

James.wrigley@firstfinancial.com.au
03 9909 5800

Regards
James
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Q: Have worked for the same company for 11 years and I’ve just let my super to be managed through work. The returns have been getting are around 7 to 8% per annum, Is this considered a good return?
A: Hi Brett,

I agree with Brendan’s comments above.

Happy to have a chat with you if you like, what’s best for you will be completely different to the next person.

I charge fee for service as Brendan has suggested.

You can email me at james.wrigley@firstfinancial.com.au or call 03 9909 5826 and we can arrange a mutually suitable time to talk.

Regards
James
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Q: I'm 70yrs and about to retire and have approx: $500,000 in super and I want t help the kids getting their first home, when I check how much they need to pay if they borrow the above amount - it's over $350,000 in interest .
As my super money will sits around with my super company but I'm will get a pension from it every year, it's easier to withdraw the money and give it to the kids so they don't have to pay that huge amount in interest - What do you recommend?
A: Hi Jean-Renaud,

You really need to talk this through with a financial adviser - I’m happy to help. Thanks Scott for mentioning me.

If you take the money out and give it to your kids, what will you love off? You’ll need to be extra careful with the age pension as Centrelink will count the gift to your children under the gifting rules and deprive you of age pension.

Let’s talk and see if there is some way you can help your children as you seem keen to do, but also don’t leave yourself short of an income.

Regards
James
James.wrigley@firstfinancial.com.au
03 9909 5826
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Q: Currently have 2 Super funds. A new fin.adv. has recommended rollover to another fund.
My main fund is performing well and better than that being suggested
He is naturally assoc with the 3rd fund so eager to recruit us. His fees work out to around $3000 pa while my current fund has a minimal fee and doesn't provide a financial adviser as such.
Both husband and I are retired and having done the Centrlink rhumba,feel our requirement for a fin adv is low.w Which option should we take ...?
A: Hi Stan,

I am a financial adviser and second Scott’s response, if you feel your need for financial advice is low now given your stage of life what were you seeking in the first place?

You should only pay fees to an adviser you see value in. If there’s no value to you in the financial advisors fees then I’d stay away from them.

Regards
James
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Q: We would like to retire in 10 years in Spain. My husband has a commonwealth PSS while I have a regular retail super. I have 2 questions:
1.- does PSS taxes stay the same if we were to live in either Australia or Spain.
2.- Do I need to pay taxes on my retail super if I draw it from Spain rather than from AU where there will be no taxes?
A: Hi Maria,

The super (whether PSS or retail) may cause you to have taxable income in Australia, and thus require you to pay tax here regardless of where you live in the world.

If you are over the age of 60 when you access your retail super - it will be tax free to you in Australia. The tax treatment of that pension in Spain, I have no idea and you’d have to seek advice.

The PSS super is treated as ordinary income (with maybe some tax offset) so depending on the size of the pension could cause your husband to have to pay tax in Australia, even if he lives overseas.

Ideally you should seek advice so as to ensure you are both doing all you can to maximise your super benefits before retirement in 10 years.

Regards
James
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Q: I have just registered as a sole trader. I will obviously have to set aside my own tax and super. Will concessional or non concessional contributions to super will be more beneficial to me?
A: Hi Holly,

Your question about super contributions will depend on the income you earn.

The concessional super contributions will be tax deductible so if your income his high enough the deduction could be valuable to you. Otherwise the non-concessional may be the way to go.

As Andrew pointed out, you should seek advice regarding your specific circumstances.

Regards
James
answered
Q: hi there just needing some sound advice. my mother recently passed away suddenly and has left her house to myself and my siblings will we have to pay capital gains tax on this house if we sell. we both reside in the house at the moment,also will we have to sell with the 2yrs of her death?
A: Hi Vanessa,

If they house was your mother’s primary residence and you’ve now moved into it, you can sell without worrying about CGT.

So long as you are now treating you’re mother’s house as your primary residence.

Regards
James
answered
Q: If I use some of the funds I have in my redraw account to start a share portfolio will the funds be tax deductible?
A: Hi Jacinta,

Ordinarily borrowed money used for investment purposes would be tax deductible, however taking money out for your redraw likely won’t be.

It becomes very difficult to work out what part of your interest cost is for your home loan & what is the investment part.

Best to talk to a mortgage broker about having your loan ‘split’ in this way you can have a portion of your loan set up for the investment in shares specifically & therefore deductible. Whilst the remainder split will be for your home.

Hope this helps.

Regards
James
answered
Q: Im about to receive my superannuation early (age 40) along with the tpd insurance payout. Will the taxable component affect centrelink payments ie. Ccr, ccb and ifso should i put some aside for the next tax period to cover overpayment for this financial year so far?
A: Hi Alan,

Sure. As Glenn said you’ll find the payment from super will impact the Centrelink benefits you mention - so don’t rush out and cash in the whole thing if you can afford not to.

I suggest you reach out to Glenn, myself or an adviser at your super fund to get some specific advice here. Some very favourable outcomes can be achieved, you may not have to cash in the whole benefit & if you meet the TPD definition you can leave money in super but still have access to it in the future.

Regards
James
answered
Q: Im about to receive my superannuation early (age 40) along with the tpd insurance payout. Will the taxable component affect centrelink payments ie. Ccr, ccb and ifso should i put some aside for the next tax period to cover overpayment for this financial year so far?
A: Hi Alan,

I second Glenn’s comments above. Please don’t rush out and cash in your super.

With some careful planning there are some potentially much more favourable tax & Centrelink outcomes that can be achieved.

Regards
James
answered
Q: My accountant did not include total charity donation in last years return leaving $4000 for this year, then said oops, can't claim, can claim only in the year it is paid. Is this correct?
Then this year, supplied calculations to take to Centrelink re appeal for pension.
Centrelink reviewed calculations for profit on shares but said they were not interested in any Figures as they are DEEMED on total face value of shares. Have I got a totally useless account. $200 for useless, unusable advice??
A: Hi Diane,

Yes you have. Both very simple mistakes that any reputable accountant shouldn’t be making. I’d be looking elsewhere next time.

Regards
James
answered
Q: Hi I was wondering if you could give me some options regarding my current financial situation?

So I'm currently 19, studying full time at uni and casually employed at McDonald's (earning about $200-300 a week)

My main question is should I save up 10K to invest in Vanguard (VAS/VGS/VGE) or should I put my current savings in a HISA like ING. I currently have 1.5K in my NAB savings account and about $300 invested in Acorns. Thank you.
A: Hi Martin,

As above, both is a good idea.

You should keep some cash savings in case of emergency but also do some investing at the same time. Your Acorns account is a great place to do this.

I imagine saving up $10k will take you a while. That’s lot of missed time that your money could be working for you in something like the Acorns account.

At 19 the greatest asset you have ahead of you is time. As I say to all my clients: start small, start now & make it regular. Then just let the compound effect work for you.

Best of luck.

James
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Q: About to start a share portfolio and would like to ask about the fundamentals people use as part of their consideration of whether to invest in a particular business?
A: Hi James (great name!),

If you are just starting out & assuming you have a small starting balance here's some tips:

1. Watch your expenses closely. Things like brokerage, and management fees will be relatively large expenses when you first start out - not so much as your balance grows, but they will hurt to being with. Look to minimise these as much as possible as they will diminish your returns.

2. Start with building a position in a well diversified investment. Something like an Australian or International index investment is a great way to start. You wont get the stellar returns you can brag to your friends about but you are also much less likely to lose everything because of a wrong stock pick too. Once this position has built up a bit over time you could look to take a more active position in one stock over another, but never put everything into the one stock. If you get burnt initially, it will be hard for you to build the courage to get back in there.

3. Be consistent with what you do. Go into share investing (like any investing) knowing markets go up and down over time. If you consistently invest on a regular basis, regardless of markets up or down, you will average out these market movements - reducing their impact over time.

4. Don't go into share investing trying to make a quick buck. This needs to be a long term strategy think 5 years + (but more 10+) so only invest money that you know you don't need right now and is surplus to your living needs.

Hope this helps. Best of luck and reach out if you need anything more.

Regards
James
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Q: Hello,
My Partner and I (mostly me) have been thinking about starting an SMSF to invest in studio apartments in Kings Cross area.
We have a combined balance of around $120K, we are both late 20's, combined monthly super contributions of around $1,300.00 with the potential to increase that to $1,600.00 PM.
The plan would to live of the rental income in retirement, from what i've said do you think its worth visiting a FP?
A: Hi J T,

I’m a financial planner and do a lot of work in this space. It’s a great idea you have, problem is you don’t have enough combined super to start with.

The finance brokers will be able to confirm but the banks have made SMSF borrowing a lot harder. Most banks want to see a combined balance of $200-$250k before they will approve finance.

For the next few years you should concentrate on building your combined super balance, then revisit your plans regarding the SMSF.

Regards
James
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Q: If I purchase an investment property through my SMSF and then on reaching retirement, I choose to wind up the superfund and transfer the house to myself for Owner Occupation, do I need to pay Stamp Duty on the transfer to myself, or is this exempt.?
A: Hi Ken,

Off the top of my head I’m not certain if Stamp Duty is payable or not. The rules differ from state to state.

I know you can transfer from person name into the SMSF & provided certain conditions are met you can get an exemption. I’m just not certain of the other way around.

What I typically see happening upon retirement is that you sell your existing principal residence (tax free) then use this money to purchase the property from your SMSF. Stamp duty is definitely payable in this scenario but it has the benefit of making sure there is money in your SMSF to live off in retirement. They way you have described takes all your money out of super.

Regards
James
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Q: Is it better to take maternity pay at half or full pay? My work provides 14 weeks full pay or 28 weeks at half pay. I have no concerns over my ability to budget I am just trying to work out which approach will work better financially. Factors to consider.
1. My pay goes straight onto my mortgage which has interest calculated daily
2. Maternity leave begins in December if I take it at full pay it will all be used by the end of the financial yearn half pay will roll into next year.
A: Hi Mary,

Tax wise better at half pay, if you can afford it.

Given the way the tax scales work your after tax income will be more than half of what you get now (you’ll lose less money to tax).

Even better if your half pay maternity payment rolls into the new financial year. Depending on your other income that year you may have all of your tax refunded for the 18/19 year come tax time.

Regards
James
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Q: Hello.  My names Nick.    Im.just after a quick answer or your knowledge on my situation.  Im single 50yrs old.    With $2million in managed funds withing Anz bank. Ive been with them 10yrs now. An average of 8-9% returns. Which included 2007 GFC .  

I have no debts.  Own my house.   Now. If i retire  would it be reasonable to assume a 4% SWR  yearly. Say $7k monlthy withdrawal.  For the next 30-40yrs....  will i still retain my principle ?.  Im asking th
A: Hi Nick,

I’m more than happy to talk with you abut what you are looking to achieve, I have many clients in similar position as you.

Drawing $7,000 pa from your capital base isn’t too much of an ask & provided invested appropriately you shouldn’t eat into your capital much, if at all.

The biggest risk you’ll have here is that traditional managed funds sell units to pay your $7,000 per month. Selling is fine when markets are rising, not so much if they are falling as you have to sell more and more units to get that same $7,000 - this depletes your capital very quickly.

The better option is to structure your investments to live mainly off income generation. We have a particular way of doing this for our clients which I’d be happy to show you.

The other thing to be looking at is the structure in which you hold your money. Ideally you should be looking to move some of your capital into the superannuation environment so that you can benefit log term from the tax advantages. Being only 50, if you want to retire now you couldn’t access super so need some money outside of super to live off.

There’s a big discussion needed here. I’m based in the Melbourne CBD but happy to travel to you if we can arrange a mutually agreeable time.

Regards
James
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Q: As a first time investor would you currently be recommending shares or property?
A: Hi Philip,

That’s a hard one to answer on here and will depend on a range of factors.

For example how much you have to invest, your ability to add more to the initial investment over time, your appetite for borrowed money (eg for an investment property).

You need to sit down with someone ans work through where you are at and where you aspire to be over the coming years. Your investments should then be chosen around this.

Regards
James
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Q: We have a family business and would like to know if there are any restrictions for 3 or 4 of the family to set up a smsf together?
A: Hi Angela,

You, your husband & your two kids is fine and very common.

No real impact on the kids. They can choose to leave the SMSF later if they want and just ‘roll out’ their entitlements.

Regards
James
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Q: We have a family business and would like to know if there are any restrictions for 3 or 4 of the family to set up a smsf together?
A: Hi Angela,

There are restrictions on who can be members of the one SMSF. There’s a restriction on employees being members of your SMSF unless they are related.

The definition of relative here includes an individual who is a parent, grandparent, sibling, uncle, aunt, nephew, niece, lineal descendant or adopted child of the individual or of his or her spouse. A spouse of the individual or any other individual referred to in the previous sentence is also a relative.

Also remember that you can only have a maximum of 4 members of the one SMSF.

Regards
James
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Q: We are thinking of selling our home and contacted Purplebricks as we saw their ad about flat fees. We would hope to get around $1.9 - $2m for our property so it would save us about $25,000 but they said their fee is paid upfront. Do you think this is a risk and is there another we could structure the payment?
A: Hi Liz,

There was an article in the Fin Review about this over the weekend, you should google it.

From my understanding you pay regardless of sale. This can be good if you sell but not so good if you don’t.

As with anything like this make sure you do your homework before committing to anything.

Regards
James
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Q: My mother’s fortnightly pension was around $360 p.f but with the recent changes to the government asset tests it is now $260 p.f. She owns her home and is worried about the lost pension and have to live off the funds in the bank. She has about $400k in the account and we would like to ask if there are other options for someone who is quite conservative to get a better return?
A: Hi Tami,

Yes there are options to make sure your mum is getting all the age pension she can.

Once that’s tackled it’s important to look at the income returns your mum is getting. As you’ll know money in the bank gets you next to nothing. Again there are options to increase this without taking on too much risk.

I’d be happy to help if you wanted to reach out. I’m in Melbourne and don’t live too far from Coburg.

Regards
James
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Q: Hi am looking at buying a bush block of land just for a little hobby farm. Have no intentions of building a house etc. Just wanna chop some wood and clean the place up and have a peaceful place to go and unwind. Would this be a poor investment???
A: Hi Troy,

What you have described is a lifestyle decision, it’s not an investment. If you are trying to make money from the block of land then that’s a different story.

If the rest of your finances are in order, debt & retirement savings are under control then somewhere like you have described would be a great place to unwind.

Regards
James
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Q: When I turned 18 I was ignorant and went and got a credit card straight away. I neglected to make any repayments and as such have a poor credit rating now. 5 years later and I just recently bought a new car and the finance is 19% p.a.

The cars market value is about $20,000 but the loan is $29,000 roughly. I can get a novated lease to the market value of the car but need to get rid of the gap. Is there any way to do this? Haven't missed any payments on my finance for the past 2 years.
A: Hi Jarrod,

How have you ended up recently buying a car with a market value of $20k but have a loan outstanding of $29k?

There's normally may finance guys on here who may be able to help you separate the $9k out to a personal loan but I'd expect the interest rate to be even more.

Either way you really need to concentrate on paying down that debt. There's not a whole lot of point having any type of cash savings when you owe money at 19% interest.

Regards
James
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Q: We have a house that is worth approx $800,000 and we have just purchased a property in Queensland for $420,000. We would like to move up there but are unsure whether to rent out our current home or sell it? If we do sell it can we put any surplus funds into our super without it being taxed? We are about to hit our 50's and haven't got much super. We need to know what our options are.


Any advice would be helpful
A: Hi Daryl,

Provided you stay within the annual contribution limits, then yes you could put the sale proceeds into super.

The type of contribution would be a non-concessional contribution. This type of contribution is not taxed when you contribute the money to super, provided you stay within the limits.

Limits are $100k pa or 'bring forward' three years worth of your limit for up to $300k in one go.

It's big numbers involved here so best to see professional financial advice - I can help if you want it.

Regards
James
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Q: We are both on Centrelink pensions we have seperated but share care and a housing place as we have two children who have severe lifelong disabilities and care for one child each. They are just about to be left a house in a will from family would it be smart to put it straight into the children's names or into one of our names as we will be lifelong guardians?
A: Hi Karen,

If left to you then put in the boys names you will get caught with the Centrelink gifting rules which will impact your pension benefits.

If direct to the boys not so much an issue. But if it's via a will & the person has already passsd away there's nothing you can do about it now.

You should look into & seek advice about a special disability trust. Under this type of trust you can transfer money (or the house) & not be caught by the Centrelink gifting rules. There are strict requirements so best to seek advice from an accountant/lawyer or financial adviser who has experience in the space.

I don't have the necessary experoence to confidently help you but can put you in contact with people who do.

Regards
James
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Q: I have a house in a good capital gains area and have moved into my partners house 6 months ago. He died and gifted me the house and 100 acre property. I have other income from smsf ( just turned 60), and another blue chip property shared with business partner. ( the rental provides a reasonable living for us both). My question is about the tax of the gift property in low capital gain area ( but where I choose to live) , and if I would best to rent the former dwelling, or sell it.?
A: Hi Suzie,

Sorry to hear of the passing your partner.

Inheriting the property doesn't cause any tax - that transfer is tax free. Tax can become an issue if you later decide to sell the property. Given he lived in the property & of you continue to live in there as your primary residence you will be able to sell tax free in the future if you wish.

Selling or renting your former house will depend on your overall financial situation as to the best outcome there.

I suggest you talk to an accountant who can help you with your primary residence and tax exemption. You may be able to sell your former residence tax free (or with minimal tax) now. Talk to an accountant who can help you through it.

Regards
James
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Q: I have a margin loan that I've let the interest owed on accumulate. The interest accrued offsets my tax. I'm now nearing retirement (within 2 years) and wondering if i should start paying off the interest now and close it by retirement stage. The loan was used to purchase shares and i'd like to keep the shares if possible. Should i pay it off in the next 2 years or wait until post retirement?
A: Hi Marie,

General rule of thumb is to pay off your debts by retirement (or as close as possible).

Given only a couple of years away you should also consider making pre-tax super contributions. There could be more tax benefit in the super contributions and leaving the loan until you retire.

You'd be best placed discussing your options with a professional financial adviser, in person.

Regards
James
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Q: Hi just wanting to know what the best investment options for about $150-$200k. Was thinking a long term investment account but what would be the best way to go with that. Also I currently receive a pension so it would have to be within what I could earn in interest which is I think is approx. $200 per week. What do you
consider to be my best options?
A: Hi Angela,

That's a hard question to answer without knowing more about your situation. A term deposit may be appropriate or shares may be appropriate, can't tell without knowing your overall situation.

Regarding the pension. The investment would be deemed, so the interest you earn on the investment won't matter. Centrelink will only assess the deemed amount on the investment.

Regards
James
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Q: How much can I currently have in my super to be eligible for a part pension?
A: Hi Gary,

This will depend on a few factors. Are you single or part of a couple and do you own a house or rent?

If single homeowner you can have total assets outside of the value of your house up to $550,000 and still get a part pension. Above this you will lose the pension.

Assets include super, car, home contents, money in the bank, shares etc.

Regards
James
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Q: Can a child of 7 Years old buy a property using her deceased mothers life insurance/super payout?
A: Hi Andrew,

The money from the deceased mothers estate will likely have to be held in trust until the child turns 18.

The executor of the estate may be able to purchase a house with the money for the benefit of the child - if that was deemed to be acting in the best interests of the child, you'd want to speak with an estate planning lawyer regarding this.

Regards
James
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Q: Hi
My husband is 63 and I am 61. We are both retired, my husband at 54/11 with a defined benefit superannuation pension. I retired at 59 due to if health. My portion of superannuation is approx. $100,000 and out financial advisor is suggestion we invest in La Trobe direct mortgage fund. I would then receive any interest earned paid to me each month.

What are your thoughts on this?

Sheree C
Melbourne.
A: Hi Sheree,

If the $100k is the remainder of your retirement savings, outside of your husbands defined benefit pension, I wouldn't be putting all of it in any one investment. Regardless of how good it sounds. The old don't put all your eggs in one basket.

As with the comments above it's hard to provide much more without sitting down with you to understand your overall financial situation & needs during retirement.

Also, whenever I hear of someone finishing work early due to ill health, I dig a bit deeper. Depending on the severity of your ill health you may be able to claim on insurance benefits in your super fund. Have you explored this?

Regards
James
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Q: I am a practice manager contemplating buying a vet practice in partnership with a Vet friend. We are currently looking into how our income should be split and paid. We are going into this venture as 50-50 partners - could you please advise on what the recommended or appropriate wages/income split would be, given we will both be engaged in different roles within the business, of which one is usually paid higher than the other?
Thanks
A: Hi Brett,

I wrote a response on this exact scenario in the previous question.

My clients pay wages to each partner based on the role they take on within the business then split profits based on ownership.

I suggest talking to your accountant as they will be best placed to advise you.

Regards
James
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Q: Hi
I am a Director and co-founder of a small start up business. My business partner and I hold the shares 55 to 45 (me). My business partner is the Managing Director and invests 20 hours+ each week operationally. I invest around 5 hours. My question pertains to how to best capture the Directors' lost time in a business without revenue at this stage. Should we come up with a seperate agreement to pay out once profitable or journal in balance sheet?
A: Hi Susanne,

Clients of mine who are like this agree on a wage to pay each other based on job within the business & hours worked.

They then split profits based on ownership percentage.

How to record when there are no profits you'd have to check with your accountant.

Regards
James
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Q: I am thinking about starting a TTR to supplement my income. I earn on average $720 per week before tax. My partner is 69 and gets a part pension. What is the best way to go about a TTR?
A: Hi Karen,

You'll need to contact your super fund and enquire on their process, typically you need to complete a form.

Be careful starting a TTR when you have a partner on age pension. Once you start the TTR the balance of your TTR will count in your partner's age pension eligibility. Worst case you could cause him to lose the age pension altogether.

You should seek professional financial advice to guide you through this so you don't inadvertently case a loss of the age pension.

I can help if needed.

Regards
James
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Q: Mum is 74 years old,living alone at home, but needs to go into a high care nursing home. She only receives a minor part pension as she has approximately $400,000 in a super based managed fund.
She was told that when she goes into the nursing home she will loose all pension/care benefits as her home will be treated as an asset in full and she will have to pay maximum fees. Can she sell up and gift some funds to her children? Centerlink said 5 yrs still her asset, but what about after?re-assess?
A: Hi Rob,

What your mum has been told regarding pension benefits is wrong.

Depending on what happens with the house will dictate what happens to Centrelink benefits but it's possible to retain the house for a period of time and keep Centrelink benefits.

Your mum will have to pay the advertised rate for the room but again there are options here that mean she may not have to hand over a large lump sum of money.

Aged care is a complex field with many competing factors at once to consider (Centrelink, affordability, remaining estate etc.). I provide advice in this space and can help you navigate everything if you want.

Reach out if you would like my help.

Regards
James
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Q: I have been separated for 2 years, and have just sold the family home. I believe a 50/50 split of the equity is fair but my estranged partner believes she is entitled to more as my father passed away 10 months ago and she is wanting some inheritance as well. My fathers estate is still in probate and overseas. I am self employed, pay maintenance for our child, the ex does not work and has never worked.
Does my ex have claim on my future inheritance, or for a higher split in the equity?
A: Hi Antony,

I suggest you speak to an estate planning lawyer. By the sounds of your scenario their fees could save your inheritance.

Regards
James
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Q: My mother has passed intestate and her superfund has determined to pay 100% of her super to her spouse, my step father. My step father intends dividing the super keeping 20% for himself and paying my mother's 4 adult children each 20%.
Can you advise whether it is appropriate I consider this as gifted funds and do not pay tax on my 20%, or should I pay the ATO the applicable tax which I believe is 15% of the inherited super funds?
A: Hi Tim,

This will be gifted money from your step father. The beneficiary of the super payout is your stepfather, since he was your mother's spouse he will receive the super benefit tax free.

The gift from your step father to you will also be tax free.

Regards
James
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Q: I'm on a disability pension and applying for a permanent disability claim if I get it it will be around 90000 lawyers fee approx 7000 then tax bout 5000 could you please tell me if and how this may effects my pension and family tax?
A: Hi Traci,

Yes the money could impact your disability support pension. That pension is income and asset tested so depending on your other assets it could impact you pension.

There is some planning work that can be done to lessen the impact of it does impact your pension.

Best you seek advice from a lawyer and or financial adviser who can help in this space.

Regards
James
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Q: i inherited a house from my mother 3 years ago . How much to put in my name -on disability pension so dont have much $$$$ - also if i wanted to sell do i have to put in my name - mother had will leaving house to me ?
A: Hi Bill,

This is an interesting one. If you inherited the house three years ago, who's name is it in now?

You are supposed to notify Centrelink of your inheritance within 14 days of you being able to access it. If you choose not to access the inheritance and instead leave it in your mothers estate that doesn't matter - as far as Centrelink are concerned it's still your asset. If Centrelink find that you should have notified them earlier & you didn't they will likely ask you to pay back any over payment of disability support pension.

The outcome here will depend on who occupied the house following your mothers passing. Did you occupy it, was it rented out or did it sit there empty?

Given the inheritance occurred 3 years ago, there may now also be tax consequences on selling. Again this will depend on who occupied the house?

Sorry, I've given you lots of questions and not too many answers. You need to sit down and work through this with people that can help you get the best outcome an accountant, an estate planning lawyer & a financial adviser would be my suggestion.

Let me know if I can help any further.

Regards
James
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Q: I am 55 and my preservation age is 57.
I wish to access a property held by my husbands and my SMSF when I retire at 57.
With the Superannuation changes from 1 Jul 17, how do I go about accessing the property or withdrawing it from the SMSF so my husband and I can live in the property.
My husband is also 55 but he won't be retiring until age 60.
Also, what will the taxation implications be?
A: Hi Jenny,

You are really going to need some legal & financial advice here to make sure you 'tick all the right boxes' and minimise any tax implications.

There's a range of ways of getting the property out, each with different tax outcomes. You can 'pay' the property out as a form of benefit payment - this may or may not cause tax in your SMSF and tax to you personally. You could also 'buy' the property from your SMSF - again this may or may not cause tax in the SMSF. It all depends on what you do or don't do before taking the property out.

You'll need to consider if there's a loan on the property & how this will be paid. Also need to work through what assets are being left behind in the SMSF to live off in retirement & also is it actually worth keeping the SMSF after the property is out or is it best to close the SMSF and move any remaining super elsewhere.

I realise my response is a little vague but I can't give you appropriate advice over this website and without knowing more of your situation.

Please don't hesitate to reach out if you do want some real advice on this, there are a lot of parts to consider.

Regards
James
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Q: I wish to start putting some extra money aside into super myself (I earn $55k and wish to put some money aside each year (up to $5000). The question is i think this extra will be tax deductible? And also what are the requirements if we need to access it later - are we able to withdraw the money that we have put in)
A: Hi Mark,

Yes, the $5,000 could be tax deductible. There are some forms you will need to prepare and lodge with your super contribution & annual tax return but yes, it can be deductible.

Be mindful of the annual limits on these types of contributions of $25,000 pa. This includes whatever contributions your employer is making for you as well as this $5,000.

You will not be able to access this money once you've put it into super until you satisfy what's known as a condition of release - generally you reach a certain age & retire (there are some other options). So, depending on your age, you may not be able to access the money for quite some time. Please keep this in mind if making any extra super contributions.

The 2017 Federal Budget did propose allowing people to use their super contribution to help buy a first house but as yet this has not been legislated so don't rely on that just yet.

Please let me know if I can help any further.

Regards
James
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Q: I currently have my superannuation with REST. I am not working at the moment and am on Centrelink benefits. I was looking at early release of super due to severe financial hardship as I qualify, however REST do not grant access due to this & I do not qualify for compassionate hardship.

I am wondering is it possible to open a new super fund (one that does allow early release of super due to financial hardship), transfer some of my super from REST into that & then apply for early release?
A: Hi Penny,

I believe this would be possible. There's nothing stopping you moving some of your super to another super fund. Then if they will realease due to financial hardship that should be fine.

You'd want to watch the tax on taking any money out - depending on your age.

Regards
James
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Q: I am about to receive a large amount of super and would like some advise on what I should do?
A: Hi Rebecca,

You talk to someone who can give you professional financial advice.

What you should do with the money will be entirely dependent on your age, overall financial position and your priorities for the coming years.

It's not an easy one to answer on a forum such as this.

Please reach out if I can be of further assistance.

Regards
James
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Q: Hi, I am 60 years of age and was thinking of semi retiring, have 400,000 in super. My wife is still working and has about 200,000 in super. Not sure if should pull all of mine out and put in bank or agree to receive say 10% per year. New rules mean i pay 15% tax on money earned in super. What is the best way of managing my money today?
Cheers
Garry
A: Hi Garry,

Please don't rush off and take your super out without talking to a professional about it beforehand. Recent rule changes mean it's very hard to get large lump sums of money into super once it's come out.

Super is a tax structure, set up to help you fund your retirement - exactly as you have outlined you intend to do. There are many things you can invest this money in whilst it's within that super structure and potentially pay a whole lot less tax than investing in your own name.

Earnings on money taken outside of super is taxed at normal marginal rates (just like your wages) where as inside super it's capped at a maximum of 15% as you say (this drops to 0% once you start a retirement pension).

Money inside of super can also have better outcomes when claiming age pension benefits in the future (depending on your assets when the time comes).

Please seek professional financial advice before you do anything, so that you fully understand the impacts. I see you are in Mildura, I can assist via phone/skype if you would like.

Regards
James
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Q: I am expecting to receive $500,000 from TPD due to illness
I also have $300,000 in Super
I am only 54yrs and my preservation age is 58yrs
My question is how to minimise the tax on the 500k
Do I transfer to super (concerned with the contributions Cap or only make a partial withdrawal
Could you please explain the options ?thanks
A: Hi Mike,

TPD payouts is a complicated area with the tax on the proceeds if taken as a lump sum based on a formula. Depending on where you hold the TPD insurance you may not actually have to cash the full benefit out (which can limit any tax payable) and instead take it as a pension - regardless of your preservation age.

You'll get different tax outcomes depending on lump sum payout Vs pension option.

You then need to give consideration to what you are going to do with the insurance payout & your super - this is designed to support your life & so should be thought of carefully.

This is one area where you should really get professional financial advice & ideally before you receive the payout as once you get the payout it may be too late to do anything.

I can assist if you if you need. Please don't hesitate to reach out.

Regards
James
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Q: I want to make a $50K contribution to my superannuation. Can I claim a tax deductions?
A: Hi Lesley,

The rules Scott referred to were actually changed from 1 July 2017. As of this date anyone can make a tax deductible contribution to super regardless of if you are an employee or self employed.

Couple of things to be mindful of.

You can only make a total of $25,000 in tax deductible super contributions in an annual year. This is a combination of contributions made in your behalf by your employer and your own voluntary tax deductible contributions.

Age restrictions start to become an issue once you reach age 65.

Best you seek advice from a financial adviser or licensed accountant to make sure you tick all the right boxes and don't miss out on the tax deduction.

Reach out if you need any further assistance.

Regards
James
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Q: My father is old and he didn't want to live alone or a home.
So he decided to sell home and live with us so we could look after him, but our house was small so we sold our home.
So dad gave us money from the sale of his house as a gift.
So we bought a house and put the house in our names not dads.
My question is after dad passes away, can family members take our house away from us?
A: Hi Graham,

I'm no lawyer but I'd be surprised if family members could take your house away from you. Perhaps if they could somehow prove you coerced your dad into gifting the money to you against his will the perhaps they could. I'd pay a visit to a local lawyer to be on the safe side.

One thing that you'll want to watch though is if your dad is on the age pension, there are limits as to how much he can gift without impacting his age pension.

The better outcome may actually be to create a granny flat right, which is quite common in situations such as yours where your dad has effectively contributed towards the cost of the new house. Again, another complicated area where you should seek personal financial advice but could mean your dad isn't caught up with the gifting rules.

Let me know if I can be of any further help.

Regards
James
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Q: Just got my statement from my income protection which I was on for 5 months they didn't tell me I wasn't getting talked on it until my last payment in June .My question is I wasn't getting super or any allowances during the period and incurred medical cost whilst overseas when I returned to Australia had on going therapy is there anyway I can incorporate these into reducing my tax .I received 50.000 in the 5 months of which 20.000 was a lump sum .?
A: Hi Arron,
I'd talk to an accountant to see what you can do. There's this thing called the Net Medical Expense Tax Offset that may allow you to claim some of your medical expenses against your income.
Your local accountant should be able to help you.
Regards
James
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Q: I am 54 years old and will be leaving the workforce due to an auto immune illness. I have been cleaned out by the ANTI Family court twice so only have approx. $200K in super left. No longer own a house but do have some land. Can I access my super early due to early retirement? And what are the taxation implications? Thanks.
A: Hi John,

There are very limited circumstances to access your super prior to what's known as preservation age, which is likely a couple of years away for you. Early retirement isn't one of them.

There's an early release option for financial hardship, which you may qualify for.

Best bet is to talk to your super fund. Don't just talk to the person in the call centre, ask to speak to someone about superannuation early release.

Also, when you do stop work make sure you get along to Centrelink to see if you can qualify for any assistance from them.

Regarding tax on your super, you will likely have to pay some as you are under the age of 60. Your super fund will be able to confirm the taxable components of your super benefit for you.

Let me know if I can be of any further help.

Regards
James
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Q: I’m 61 and planning on retiring in 4 or 5 years. My question is about superannuation as I’d like some advice of how much I can put into my super and is a self-managed fund a good idea at my age?
A: Hi Fred,

There are annual caps on what you can put into super. The concessional limit is typically for contributions made by your employer or via salary sacrifice, this limit is currently $25.000 pa.
There's another limit called the non-concessional limit which is for after tax money you might have in a bank account for example, this is currently $100,000 pa.
You really need to be careful of contributions made in previous years as it's really easy to slip up here.
An SMSF could be great at your age, I have many clients with them of varying ages. There's lots to consider regarding SMSF, super balance is one of them.
You really do need professional personal financial advice in there's areas. There's no substitute to taking through your unique situation with an adviser.
I'm happy to help if you want to reach out. Phone or Skype would work great given the distance between us.
Let me know if I can help.

Regards
James
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Q: USD interest

I have > $250k sitting in a zero interest acct in the US. I am awaiting a drop in the Aud before bringing home.

I think the US share market is at a high and so do not think Shares or ETF's will preserve the capital. I dont think I can have a USD interest bearing account as a foreigner.


Any thought on where I could park this money?
A: Hi Mike,

There are investments here in Australia (ETF's) that track the performance of the USD relative to the AUD you could use too. In addition there are many great Australian companies that have USD earnings, that should the AUD drop - their earnings will benefit.

You don't have to leave it in the US hoping for the dollar to drop.

Reach out if you want some help.

Regards
James
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Q: Hi, I'm a first home buyer and want to know how much I can borrow without paying for mortgage insurance?
A: Hi Carly,

You can typically borrow up to 80% of the value of the property without mortgage insurance.

A finance broker maybe able to stretch that a little further for you but 80% is a rule of thumb.

Typically lots of finance brokers respond on here so perhaps reach out to one of them.

Regards
James
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Q: Putting money into super.

I don't have any superannuation and am 60 years old with no income or Centrelink payments. I have been given $100,000 and am wondering should I set up a SMSF and put this into it or should I put it into a managed super fund.

How much can I put in prior to June 30th? What are the implications of putting the $100,000 into a fund?
A: Hi Helen,
You are able to put money into super regardless of work or not under the age of 65. The limit for the type of contribution you are looking to make is currently $180,000. This will drop to $100,000 from 1 July 2017.

If all you have to put to super is $100,000 you will likely find the administration burden and cost of an SMSF too much, compared to other super funds.

The other thing to consider is do you have the expertise to manage the money or can you pay someone for this or would you be better off leaving it to one of the big super funds.

There's lots to consider and best if you seek professional personal advice to determine what is best for you. Taking into account you're overall position and plans for the next few years.

Regards
James
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Q: Hi guys,
I don't know whether I should invest my minimal savings into the stock market or into a long-term saver. What are the benefits of both? Why should I steer clear of one and not the other? I've heard shares are super rewarding long term, but I also know I need to do a lot of research. Can you help me?
Thanks!
Ruby
A: Hi Ruby,
You need to start with what you intend using this money for. If it's money you intend using for something in the shorter term (think less than 5 years) then you probably don't want to take the risk of investing in the stock market.
If on the other hand it's long term savings that you don't need & have other sources of income to survive then the stock market can be a very rewarding place to invest over the long term.
Regarding super you need to not think of this as the stock market. Super is just one way of holding your money where you can potentially pay less tax than if you had that same money in your own name. You can hold money in a term deposit in super, just like you can hold shares in super - regardless of what your money is invested in you could possibly be paying less tax.
Hope this helps, please don't hesitate to reach out if you have any other queries.

Regards
James
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Q: We are selling our home which we have owned for 6years, we have rented it out for the last 6 months, do we pay CGT?
A: Hi Geremy,

So long as you lived in the house for the period before you rented it out you will still be able to sell the house without havig to pay capital gains tax.
The ATO allows you to treat a former home as your primary residence for up to 6 years after you leave it (and rent it out) without having to pay capital gains tax. Refer to the following website.
https://www.ato.gov.au/General/Capital-gains-tax/In-detail/Real-estate/Treating-a-dwelling-as-your-main-residence-after-you-move-out/

Regards
James
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Q: I am 64, not working & receiving an allocated pension from my Super Fund.
My wife is 60, working part time ($13000 annually) & contributing to her Super Fund.
If my wife ceases work by the time I reach Aged pension age & also ceases contributions to her Super, will her fund still be considered to be in Accumulation phase & thus not be included in my Income/Assets for purposes of my Aged Pension application?
Thank You.
Kevin
A: Hi Kevin,
Whilst your wife is under 65 and her money remains in accumulation mode of super it will not be counted as an asset for Centrelink purposes or impact your age pension.
Your wife's money can stay in accumulation mode forever. The work test Damien refers to only relates to her ability to make any further contributions to super after the age of 65. There is no test for keeping money in accumulation, anyone can keep money in accumulation mode indefinitely.
Given the age gap between yourself & your wife (and this exemption from Centrelink testing we have been discussing) I suggest you get some personal financial advice as there is a lot that can be done maximise your age pension entitlement prior to your wife turning age pension age.
Happy to help if you want to make contact.

Regards
James
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Q: Parents are thinking about buying into a retirement village and we would like to get some advice on the options and the contractual arrangements they need to be aware of. In one discussion it was mentioned they would lose up to 40% of the property when it came time to sell. Is this considered normal practice….. are there other options available?
A: Hi Peter,
Yes this is quite normal for Retirement Villages.
There is specific legislation that says retirement villages aren't able to generate a profit from the daily or monthly fees they charge their residents. They can only charge fees that cover the costs of the services they offer (facility maintenance, cover staff wages etc.).
As a result they typically charge some type of exit fee, I have seen many that charge 3% p.a multiplied by the number of years of residence. Typically this caps out at 10 years i.e. 30% of the sale price of the retirement village unit.
You really need to look around at this and enquire on the exit fees.
Retirement communities on the other hand have an entirely different fee structure & often don't charge exit fees.
Once someone makes the decision to move into some type of retirement living you also really need to reassess what they are doing with their remaining assets and the impact on Centrelink (age pension benefits). Some retirement living facilities will qualify for extra Government assistance in the form of Rent Assistance.

There's lots to work through when considering a move to a retirement village.

Don't hesitate to reach out if you want to discuss any further.

Regards
James

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