SPRING 2021

Are you a goal setter? For many of us our goals often come back to physical or financial health, but did you realise the two are connected? A focus on well-being, be it in the emotional or physical sense, and a desire to improve finances/money management come out on top when it comes to making a change of lifestyle.

Most of us probably have a good sense of what it takes to improve our physical health and of course, there is a whole manner of approaches. We may be driven by competing in a big sporting event, investing in a gym membership, committing to weekly exercise with friends, becoming better informed about our food choices or talking to experts in the fitness industry and being guided from there. It’s no different when it comes to our financial health and it’s important to have goals to strive for and to seek expert advice too.

How is your financial fitness? Are you standing tall and proud or conversely, gasping for air with a big hill to climb? Research repeatedly indicates that financial health and physical well-being go hand-in-hand. And with that being the case, we thought we’d delve a little deeper

What does financial well-being mean?

To achieve financial well-being, we must first understand it. And while it is a very personal state, many of us are driven by the same objectives. Great financial health is less about the bottom line than about having financial security and having the financial freedom to make choices, now and in the future.

Some of the key measures of financial well-being are as follows; from a day-to-day (or month-to-month) perspective, we want to feel in control of our finances. We also want the freedom to meet long-term financial goals such as paying off the mortgage or retiring comfortably. Another important factor that contributes to financial ‘fitness’ is being ready for any curveballs that may come about such as job loss, ill health affecting income for a time or challenging periods in the business.

The health impacts

There’s no denying the correlation between financial health and physical well-being. Data from a study by the big banks showed that 81% of respondents found other goals much easier to achieve when their finances were in order, whilst 70% stated that good financial health had a positive impact on their physical health.

Alternatively, poor financial health can have a devastating ripple effect. Money worries are commonly related to stress and anxiety which may manifest in physical symptoms such as lack of sleep, increased blood pressure and heart problems. Mental health issues such as depression can also arise when financial fears are present. This will not only impact one person in a household but all of their loved ones too and can possibly flow over into the workplace as well.

Beyond the impact on physical health, our financial health touches on every aspect of our lives such as attitudes, behaviours, and emotional stability. Our sense of worth is often linked to feeling safe and secure financially.

So, as you embrace taking charge of your future and making your dreams a reality – it’s time to consider the importance of striving for the podium finish when it comes to financial health. With so many great and wellinformed experts in the field, a helping hand is never far away for those who struggle with their finances and never quite feel on top of their money matters.

Please contact us if you are looking for some help with this.

Strategies to Boost
your Superannuation

For many people, Superannuation only becomes a priority once they achieve a sound personal financial position, or they see themselves as having limited time in the workforce. The reality is that larger Superannuation balances take time to build especially if you don’t want to take massive investment risks to reach your target.

Increase your Level of Engagement
  • Do you know how much your members balance was for the year ended 30 June 2021?
  • Do you know how much you are paying in fees either as a percentage or as a dollar amount?
  • Do you know the rate of return that your Superannuation Fund is providing you?
  • Do you know how much you are contributing to Superannuation each year?
  • Do you know what your unused Concessional Cap is?
  • How much are you paying for Insurance & TPD inside of Super and how much are you insured for?

Many people are not aware that they can reduce their personal tax burden by contributing money to Superannuation and claiming it as a tax deduction. Regular amounts (coffee money) contributed to Super can build up to a large amount by years end. Some Super providers have apps in which you can contribute regularly with minimal fuss.

Assess your Current Super
  • Determine what levels of additional contributions you can make to Superannuation.
  • Determine what rate of return is required to reach your retirement income goal.
  • Determine if your current Super provider is meeting the required rate of return net of fees.
  • Review life insurance and TPD cover to ascertain that the right level of cover inside of Super.
  • Compare the premiums for life and TPD insurance are competitive.

Insurance premiums can eat away at your Super savings if you are over insured. Insurance is a balancing act that should be reviewed regularly. Assessing your required level of cover is the key to getting this “right”. If you think your current Super rate of return is underperforming over a sustained period (one or two years is not a trend), you can get a benchmark rate with an online search of what average returns have been for their competitors. Competition in Super is hotting up with league tables, so it’s never been easier to do comparisons. A dollar saved in expenses is a dollar earned. Great returns can mean little if the cost to achieve that return is enormous.

ACT

You don’t need a financial adviser to get started, there are multiple tools online which will calculate your Superannuation balance at retirement and much of the background information is supplied by your current Super provider. To transform your information into a plan or strategy however may require professional guidance. But the first step is to get started, check where you are and direct your attention to your Super.

If you need us to recommend a Financial Planner to help you, please call us at imfs or one of our Finance Consultants.

A true veteran of the Finance Industry, Jeremy’s career started in traditional banking, with his first job with The National Bank of NZ, since then, Jeremy has lived and breathed finance for more than half his lifetime.

Arriving in Australia in 1997, Jeremy has worked with Citibank (1997 – 2004) and AFG (2004 - 2019), taking a well-earned break and doing some consultancy work and now joined IMFS.

“The building blocks of my career have been hard work, respect and integrity” Jeremy said. “These values are supported by effective communication and a level of professionalism that drives me to build and maintain enduring relationships with clients and colleagues, it’s what gets me through the day”.

“My why is always a desire to do the very best I can. My focus - solutions not sales. My how is my willingness to adapt and embrace change. These characteristics have helped me to identify opportunities, develop new solutions and make a real difference in the lives of the people I’ve worked with over the years. My motto, It’s always our pleasure to serve!”.

“For me, the opportunity to team up with IMFS was too good to miss. I’ve known Managing Director Janine Carpenter, for more than 20 years” Jeremy said. “Janine is highly respected within our industry and I’m especially proud to now work alongside her and her awesome team. My focus will be to grow opportunities for our alliance partners, staff, and delivering greater customer outcomes to our valued and loyal clients”.

Australia’s interest rates projected to stay low
until at least 2024

Australia’s current cash rate is 0.10% - a historic low, meaning credit is cheap and according to the Reserve Bank of Australia (RBA) interest rates will stay low until ‘at least 2024’.

According to the recent minutes of the Monetary Policy Meeting of the Reserve Bank Board, “Conditions in the housing market had continued to strengthen. Housing prices had increased further in April 2021. In recent months, the upswing in housing prices had become more broadly based across capital cities and regional areas.”

In the residential property market, strong demand is being driven by first home buyers taking advantage of low interest rates, generous government incentives, and the highly competitive rental market driving rents higher. People seeking lifestyle changes are also seeing increased demand for sea change and tree change properties in regional areas.

So, whether you are thinking of dipping your toe into the investment property market, taking advantage of lower rates to upgrade your home, buying your dream lifestyle property or simply buying your first home, an obligation free chat with your IMFS Consultant should be high on your priority list.

Your IMFS Consultant has:
  • Access to multiple finance products from over 40 lenders.
  • Knowledge to implement a suitable strategy for your borrowing needs.
  • Proactive, we are always looking for savings on your borrowing costs.
  • Commitment to honest and transparent communication.
  • Desire to customise a borrowing strategy to assist you to reach your goals faster.

As we have Finance Industry veterans within our business, with careers that span more than 3 decades, we actually remember when mortgage rates were north of 19%. Compare that with the current RBA’s cash rate of 0.1% and the million dollar question is, will Australia follow the lead of some other Western economies and go negative?

It’s certainly possible with rates already at an all-time low. As Australia’s 50-year Interest Rate Chart shows, the trend since that time has been downward.

The only cost for our expert advice is a small investment in time. To talk to one of our award winning finance specialists, please call 08 9228 1000. We are standing by to help.

What is Asset Finance?

Asset Finance covers a vast array of lending which as a general rule is a loan secured by an asset other than real estate.

The areas covered by Asset Finance are split into business use and personal use, so the type of loan will be determined by the way of which the item is to be used and who will be using it.

Assets that generally form the security of an Asset Loan for personal use are cars, bikes, boats, caravans etc.

Assets that generally form the security of an Asset Loan for business use are cars, boats, caravans, bikes but then on top of that are business assets such as trucks, forklifts, agriculture machinery and also all sorts of equipment from computers to photocopiers to machinery and planes and even the purchase of a business.

The terms available for Asset Finance are 12 to 84 months and in some instances there can be a balloon or a residual payment which is a large payment to finalise a loan, rather than equal payments through the term of the loan.

These loans are assessed differently from home loans as the item being purchased is normally one that will reduce in value over the term whereas a house will in most cases increase in value during the term.

Lenders will lend up to 160% LVR (Loan to Valuation Ratio) or in other words 160% of the value of the asset, whereas home loans will not go past 100% and in the case of Asset Loan, there is no need or requirement for mortgage insurance.

The benefits are immense, one only pays for an item for a relatively short term or more importantly, for the term of which the item maintains its value relative to the market.

For a business, this is also a tax deduction that should be further discussed with the accountant and for the individual it becomes a system of buy now and pay as you earn, while not loading the mortgage with a large extra debt, use an item, sell it for less and be stuck with a larger mortgage.

Imagine doing this three times for $50,000, what will the mortgage be? Where will the equity be?

Asset Finance separates loans for appreciating assets (home) from depreciating assets (cars) so as a home buyer you know you will not load your mortgage with debts for items which lose their value.

An Asset Loan reduces roughly at the same rate of which the item loses value, its been designed to do so.

So if you cut with a knife and eat with a fork rather than eat with a knife and cut with a fork, then for a purchase of an asset other than a home, use Asset Finance, it’s the most suitable way of which to fund it and let your home loan fund your home.

If you need assistance with funding an asset, please get in touch with us.

Making the most of your money

It’s a tricky juggling act to make ends meet. It feels like there’s never enough money. There’s a persistent tension between trying to be good with money and not wanting to miss out. A tension between trying to have savings and the many things you want to buy and do.

Experience shows that the juggling act is not about having more willpower. Instead, the art of money is to have a system that makes good decisions easy and automatic, and makes bad decisions difficult. This saves our precious willpower for when it really matters.

Building a Savvy Spending System

To make the most of your money, your money system needs three elements.

Priorities

What lights you up and nourishes your soul. Informed by your values, personal experience, and social science.

Plan

Your guide of how much you can afford to spend on each of those priorities in harmony with your other priorities.

This plan is often called your budget.

Process

Your strategies and techniques to help you stick to that plan in the face of daily abundant temptation and easy credit.

The techniques include the software of your mindset and habits plus the hardware of your account structure.

Where to start building your system

Where you start making tweaks to your money system depends on where you feel you are most struggling right now. If you would like us to recommend you to a Money Coach, please contact us.

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Suite 6, 9 Cleaver Street, West Perth WA 6005 | PO Box 207 Leederville, WA 6903
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ABN 83 079 756 059

This newsletter was prepared by IMFS and whilst we have taken great care to ensure the accuracy of this newsletter from sources believed to be reliable and accurate, no warranties are given and no liability is accepted by IMFS for errors or omissions or for the loss or damage suffered as a result of persons or companies acting upon the information or opinions expressed therein. We strongly recommend that readers seek professional legal or accounting advice before taking any action based on information it contains.

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