Wealth Creation Strategies

Select Advice Financial Planning offer you a range of wealth creation strategies to assist you achieve your financial goals and lifestyle aspirations.

Children’s education & savings plans

Savings can be defined as the accumulation of money set aside for future use. When you work hard for your money, you want to get returns that reward you in order to reach your goals faster and make your money work for the future. It always seems hard to start the savings process, but time plays a big factor in the end result, so the earlier you start the better.

People save for different reasons, for example to buy the boat they have always wanted, go on the trip they have been planning for years or even to upgrade or extend the house.

If you are planning to have a family or already have children, there are ever increasing costs associated with raising children from the hospital bills, clothing all the way through to their private school fees and University fees. The costs are huge and having a savings plan or investment strategy for your children is now becoming essential to avoid costly financial decisions that could impact on your savings, lifestyle and retirement.

Gearing using borrowed funds to make investments

Gearing involves using borrowed funds to make investments in assets such as property, shares or an investment portfolio. If you establish a self-managed superfund, you may also qualify to borrow to invest inside your fund. Many investors find these options attractive because loan expenses and interest costs can often be claimed as a tax deduction (please consult your tax specialist for more information in this issue.)

Gearing can be a tax effective way of creating wealth over the longer term. Greater long term investment returns may be achieved provided that the total return produced by your geared investment portfolio exceeds the costs of the borrowing. Investment return refers to income produced (e.g. interest, dividends and rent) and capital growth (i.e. the underlying value of the investment increasing in value.)

Negative gearing is a term which applies when the cost of borrowing (i.e. loan interest and other costs) exceeds the income generated from the geared investments. The loss can normally be used as a tax deduction by the investor to offset other taxable income such as salary.

It is important when considering a gearing strategy that you speak with your Accountant or tax specialist to gain a thorough understanding of the tax implications of your investment decision. As part of our client service, we are also happy to meet with your Accountant to discuss our recommendations.

Gearing using equity in your property

On most occasions, using the existing equity in your home or investment property is the easiest and least expensive way to borrow money to invest. Whether it is to buy direct shares, managed funds, grow your property portfolio or invest in alternative investments, Select Advice Financial Planning can assist you to identify the most appropriate wealth creation strategy for you.

Through our mortgage broking business partners, we can also assist our clients review the most appropriate way to access equity from your property and structure new loans for the purpose of investing.

Gearing to buy investment property

Whilst we cannot give you advice on specific properties to buy or who to buy them from, our Financial Planners can provide you will a financial plan that incorporates calculations and assessments on how purchasing an investment property can benefit your wealth creation and investment objectives.

Our advice relating to gearing for the purpose of purchasing investment properties can be for investing either outside or inside super (i.e.in your SMSF)

Margin lending

Margin lending is simply another term for borrowing to invest. A margin loan lets you borrow money to invest in shares, managed funds, master trusts and wrap accounts. This is also known as gearing. Just like investing in property where the loan is secured against the property, your margin loan is secured against your shares, managed funds, master trusts or wrap accounts. Most people gear so that they have more money working for them and can therefore accumulate wealth quicker. A margin lending facility gives you more to invest, and you have the potential for bigger returns. Of course, this also magnifies the potential for losses if investments perform poorly.

Wealth creation strategies using margin lending facilities are relatively common in Australia and many investors have significantly benefited using this borrowing format however it is not for everyone and should be considered carefully. At Select Advice Financial Planning we will walk you through all/any wealth creation strategies and ensure that the recommendation implemented is appropriate for your needs.

We can also help you with:

  • Direct Shares
  • Managed Funds
  • Property Trusts
  • Warrants
  • Alternative Investments

Self-Managed Super Funds (SMSF)

Wealth creation strategies can be implemented either outside or inside superannuation depending on your investment needs and time horizon. If you are looking to invest for your retirement in a tax effective way using borrowed funds then a Self-Managed Superannuation Fund (SMSF’s) may be appropriate for you.

SMSF’s is now the largest superannuation fund sector in Australia and an attractive way for many Australians to take control of their retirement funds and accelerate potential long term returns by borrowing to invest.

Select Advice Financial Planning can work with you to determine if establishing a SMSF is the most appropriate retirement strategy for you and advise you on how to structure your investment strategy. We can also refer you to our mortgage broking business partners to advise you on the SMSF borrowing options available to you.

Budgeting/Debt Consolidation/Recycling Debt

Many Australians find themselves in financial difficulty due to lack of savings, poor investment decisions, or unforeseen events where investments are lost. It can be an endless struggle to afford to repay existing debt, live comfortably and save for the future.

At Select Advice Financial Planning we can offer personal budget/consolidation plans on how to structure your debt, consolidate loans and achieve your financial goals. A single regular payment is often easier to manage and you only need to have dealings with one entity rather than a number of creditors. You could end up paying less due to a lower interest rate and having more savings to put towards your investment plans.

Our mortgage broking colleagues will assist you to review your current loans and advise on the best structure and loan packages available to you.

Seeking tax advice

At Select Advice Financial Planning we take a holistic approach to client advice. We not only work in partnership with our clients but also when required we can meet with your Accountant to explain our recommendations and clarify any tax issues for you. It is important that you seek tax advice from your Accountant for any wealth creation strategies you implement.