Nothing would have been possible without your support and patience. We
shall visit you soon after confirming time and date with you.

Thanks and Regards,
Braveena

How do we create wealth with the limited resources we have? Money makes money. It will be wise to maximise on the return of the capital available. Hence given a project, the return is compared in terms of Internal Rate of Return or Net Present Value. The higher the IRR or NPV, the more favourable or attractive the project is.

There are many types of investments e.g. shares, property, unit trusts, bonds or managed funds. One could leave one’s savings in an interest bearing account or in a term deposit with a higher return (both low risk) or invest in shares (which are more volatile), listed property trust or direct property investment, etc.

One could invest using one’s own limited funds or one could additionally, borrow to make an even greater investment. The power of leverage and the benefit of negative gearing in Australia will give you greater mileage, extending your investment further.

A lot of Australians are sitting on a lot of equity in their existing properties which have grown in value in the last 4-5 years especially in major cities like Sydney, Melbourne and Brisbane. This is a great resource that can be tapped into for investment. One could use the security of the residential properties to borrow funds for investment in shares or property, etc. In general, Australians love brick and mortar. While there is sufficient equity in their existing property, they can borrow against it for new investments.

With the benefit of negative gearing, if the net rental income (gross rental income less property expenses) is less than interest costs, the loss sustained can be offset against other earned or business income. Hence as long as your cash flow allows, one can invest in a property and use the tax savings and rental income to service the repayment of the investment loan taken out. It does not work for everyone but for a lot of people who are paying lots of tax, it is possible to make use of the tax savings and rental income derived from an investment property to build up a passive income for their retirement. You need to have the equity as well as the serviceability capacity to make it work.

Over the medium to long term, as the capital asset grows in value, the equity will grow over time when capital growth rate exceeds inflation rate. Historically, well selected rental properties will create wealth faster for the individual compared to one who merely parks their savings in a safe haven like a cash management or term deposit account which will be taxed at one’s marginal tax rate. With capital growth no tax is payable unless your rental income exceeds the property expenses and interest costs. THERE IS NO CAPITAL GAINS TAX IMPLICATION UNTIL THE PROPERTY IS SOLD LATER ON.

For a free consultation please contact us to arrange for an appointment.

Avoiding the traps

Buying a rental property remains a popular investment option and is an ideal way to diversify your portfolio, offset tax and generate an additional income stream. However, as with any investment, it also carries risk.

It’s a common perception among landlords that provided you select the right tenant, your investment will be as safe as houses. Research by Tern Scheer Insurance Brokers, however, shows that for 42 per cent of insurance claims paid to landlords for loss of rent, the tenant did not qualify for a refund of any portion of their bond. This means that in almost half of all instances, the expenses incurred by landlords exceeded the bond that their tenants had paid.

It’s a business transaction

Too many investors get caught up in the excitement of purchasing a home and make decisions based on an emotional attachment to the property rather than its capacity to generate income.

First and foremost you need to recognise that buying a rental property is a business transaction and any decisions you make about the investment should be considered from this perspective. This means doing your homework on the property – an essential part of any investment decision – to ensure that you go in with your eyes open.

Consider location

Many people think that a larger home will generate higher rental income, but 25 per cent of people now live on their own, which means a three-bedroom home may not attract the most lucrative returns.

In many cases, a one or two bedroom unit in a good location could yield better financial results. Buying a smaller home in a suburb closer to the CBD may require a larger initial outlay, but is likely to generate greater long – term benefit.

The well-known adage “location, location, location” is still an essential home-buying mantra and should be a key consideration when investing in property. Consider the home’s proximity to public transport, schools, amenities and shopping centres and find out how long it takes to drive or commute to the CBD. It may also be worthwhile investigating school zoning and the availability of childcare facilities.

Research occupancy rates and rental demand in the area where you want to buy. This will affect the value of your investment and give you an idea of the tenants you might attract.

Do your homework

It can be dangerous for investors to enter into a contract without checking previous rental records if the property has been rented in the past. A common assumption is that because the home has been rented previously there will be no problems, but this is not always the case. It is essential to access information about the payment history of the existing tenant as this will highlight any arrears that need to be addressed and whether there has been any previous damage to the home.

In addition, it is important to check the title of the property and who is registered on it before signing a contract. The type of title will affect the level of insurance you will need to purchase and your rights and responsibilities if you decide to sell the property. This is particularly important if the home is part of a group of properties such as an apartment or unit, because it may come under a community or strata title.

Market fluctuations

Be aware that the rental market fluctuates throughout the year, peaking between November and February and dropping in June.

A trap some investors fall into is having the property’s potential rental earnings appraised during peak periods, only to find that settlement falls later in the year when prices are lower. For example, if you have your property appraised in February when demand for rental homes is high and the settlement date falls closer to June, you may not be able to achieve the rental income you anticipated.

When applying for finance to purchase your property, you will need to provide your lending institution with a statement of estimated rental income based on an appraisal conducted by a qualified property manager.

Appoint a property manager

It can be a challenge to find the time to service maintenance requirements, address potential liabilities, select appropriate tenants and conduct regular property inspections.

However, if you don’t, you maybe neglecting your essential duty of care responsibilities, leaving yourself wide open to the risk of liability suits.

One way to minimise these risks is to appoint a property manager. A property manager will act as the point of contact between you (the landlord) and the tenant. They will be responsible for all of the day -to day dealings involving your property in return for a commission of rental income. The property manager takes responsibility for alerting you to any maintenance requirements and tenant issues, and conducts regular property inspections.

Qualified property managers have access to a nation-wide tenant default database, which can be a useful screening tool in alerting you of any unsuitable applicants.

Choose the right insurance

Insurance is an expense that some landlords try to avoid in order to reduce costs. If you purchase a cheaper policy that does not provide adequate cover, inadvertently choose the wrong type of policy, or don’t have any insurance at all, you can expose yourself to the risk of legal liability suits. Part of your legal duty of care as a landlord is purchasing adequate insurance, particularly for a strata title property. Legal liability suits brought by tenants against landlords have increased by 300 per cent over the past two years. These usually relate to a tenant or their guest injuring themselves on the property. Legal liability claims, loss of rental income and damage to rental properties (either malicious or accidental) are all risks that you can insure against. Insurance is vital to guarantee regular rental payments, regardless of what happens to the property.

While in many instances you can use the services of a real estate agent or property manager to oversee the selection of a tenant, it is your responsibility as the landlord to ensure you have a suitable insurance policy in place. Even the most fastidious tenant is able to damage a property – whether accidental or otherwise – which can prove extremely costly, both in repairs and through the loss of rental income.

By seeking a specialised form of insurance cover, you can protect yourself from the risks associated with owning a rental property. This is particularly important in light of research from Tern Scheer Insurance Brokers, which shows that up to one in six investment properties in some areas will suffer either damage by tenants or loss of rental income.

When choosing an insurance policy, you should give careful consideration to ensure it contains clauses specific to your needs. The most common risks for a landlord are malicious damage by a tenant, theft, accidental damage, legal liability and loss of rental income. In line with this, you should choose an insurance policy that has been specifically designed to address these needs.

Therefore, you need an insurance policy that considers the risks specific to renting a property. This will provide financial peace of mind and safeguard your investment, ensuring you continue to receive a steady flow of rental income.

Source: Your Mortgage Magazine – February 2005

People like property. It’s a relatively safe investment giving good solid returns. Compared to shares, which can swing wildly in price, or cash, which is little more than boring, property is an exciting investment that makes its owners feel good.

For anyone interested in property investment, investors need to know what sort of property to buy and the right price to pay. Returns come from two sources: any capital gains over time and rental income.

As the property market cools in the big cities, the chance to make huge gains in cities like Melbourne and Sydney is diminishing. Combined with a high vacancy rate in those cities, which has pushed down rental yields, investors need to take extra care to select properties that will attract tenants and gain in value.

With an oversupply of apartments looming in inner-city Sydney, Melbourne and Brisbane, investors also need to ensure they don’t pay too much for those properties. Prices are already falling for off-the-plan apartments in Sydney and Melbourne; so don’t pay more than a property is valued. We advise you on how to do your research.

The Six Steps

Returns from investment property depend on six crucial steps and you need to make sure you understand each one:

1. Picking a good location

2. Choosing a house or a unit

3. Paying market price, not more

4. Financing the purchase

5. Securing tenants

6. Using the tax system to maximum benefit

1. Picking a good location

As a general rule the better the location, the better your chances that your property will gain in value over time and attract suitable tenants. Choose an area where the general quality of properties is good and the demand for properties by tenants is high.

Proximity to the central business district and major employment centres helps ensure good demand from tenants and the capital gain of the property. Good access to public transport such as buses, trams and trains is important. Areas near hospitals and universities always attract high demand by tenants for rental accommodation. Being close to schools, parks, shopping centres, childcare centres and other community facilities can also help add value to your home. The nicer the area and the more convenient it is to live in, the safer your rental investment.

It pays to consider locations where property prices are continually rising, such as inner-urban suburbs and bayside or beachside suburbs. If you can’t afford to do this, consider suburbs that are close to the most sought after ones, as these also tend to perform well.

Buyers should ask themselves what will the area be like when it’s time to sell? Are any major developments planned for the area? You should ask the local council, developers and real estate agents what’s in store for the area in terms of new housing developments, major roads, transport links and community facilities.

If you are buying a unit, pick an area where there is a limited supply of units. Beware of buying off-the-plan units where there are more units coming on to the market. The Reserve Bank of Australia has repeatedly warned of emerging oversupply of units in inner-city Melbourne, and other analysts warn of oversupply in inner-city Sydney and Brisbane. So be extra cautious about buying in these areas.

2. A house or a unit?

Depending on your budget, you might decide to buy a house or a unit as an investment property. The big plus for houses is that they generally gain in value more than units. That’s because it is the land that rises in value rather than the structure on it. The big plus for units is that the rental return, or rental yield, is generally greater than that on houses and they cost a lot less.

Units

Units are more affordable to buy than houses. If you get a mortgage to buy the property, your debt levels and interest costs won’t be so high. If you are negative gearing (wher e your mortgage interest costs exceed your rental income and the loss is used to offset an investor’s taxable income), an investor’s cash outflow or loss will often be less than if they had bought a house.

On top of that, two-bedroom units generally earn more in rent as a proportion of the price you paid for the property, known as the rental yield, than three-bedroom houses. That’s because units not only cost less, but are often located in inner-city areas or convenient location, for which people pay a premium.

If you are buying a unit, look for feature convenient to tenants like off-street parking and internal laundries. There is nothing like a common laundry or no parking to cut down the pool of tenants or buyers interested in your property.

Houses

If you’re buying a house, look for property on a good size block in a good location. As a general rule, the land component will be a major factor contributing to the capital gain of your property over time.

Again, buy a house in areas where the demand for rental housing is strong. This could be in an area where the population is relatively young and where there are numerous families with young children, or, again, in convenient inner-city locations or business centres where tenant demand is strong.

Before you buy, you should out check out whether the house is well maintained, and whether you’ll need to conduct major repairs that could prove costly. Look for features that will attract tenants like parking, a good laundry and decent kitchen and bathroom. Again, proximity to public transport and major roads is important.

3. Pay market value, not more

A wise property investor won’t pay more for a property than it is worth. Some investors can pay too much, especially during the current property boom. A buyer should assess independently the market value of a proposed property purchase.

Ideally, a property in a good location will tend to double in value every seven to 10 years. Ask an agent for guidance on information on price growth in a suburb. You can also ask the real estate institute in your state.

4. Financing the purchase

Real estate is an expensive investment and entry and exit costs are high. For example, the median price of a residential property in Sydney is around $450,000 and in Melbourne, it is well over $380,000. Add stamp duty on top of that, and you’re looking at close to $20,000 extra cost in Victoria and another $15,000 in NSW. You also need to add legal costs such as conveyancing and building, strata and pest inspection costs, which alone can add up to a few thousand dollars.

You may need to borrow a substantial sum, especially if you have your sights set on a house. The type of loan you use will depend on the size of the mortgage and your own needs. Some investors like interest only (IO) loans or lines of credit, but a principal and interest loan will help you build your own equity in the property more quickly than an IO loan and/or perhaps a line of credit.

5. Attracting tenants

Before you commit yourself to a property, you need to check whether you will be able to find a suitable tenant that will help you repay your mortgage.

Check what the vacancy rate is for the local area with the re al estate institute in your state. As in Sydney, vacancy rates might be high or rising which means you might have difficulty finding tenants. Check also what is the rental yield in the local area. Detailed statistics on rental yields and price growth are available from Home Price Guide’s extensive Investor National Report, available for $150 as a one off report or 12 monthly reports for $995.

Again, buy in attractive locations, where other people want to live as tenants or owner occupiers like innermetropolitan suburbs. No matter where you buy, ask yourself if there is good access to transport, education, health, community facilities and adequate parking.

6. Using the Australian tax system

Under Australian income tax law if you borrow to buy a rental property, the interest and rental expenditure you incur such as repairs and maintenance are tax-deductible. If your costs including interest costs exceed your rental income, the net loss can be offset against other income you derive, which means you will be able to reduce the amount of tax payable on your other income. This is ‘negative gearing.’

A major item of expenditure you are likely to incur is repairs and general property maintenance. If you make initial repairs to a newly acquired property, the expenditure is not tax-deductible as they are considered to be an improvement. Improvements need to be added to the cost base of the property for capital gains tax purposes.

If you make a capital gain when you sell your investment property, only half the capital gain will be liable to tax if you own the property for more than twelve months.

Check with your accountant on what deductions you will be entitled to. As a word of caution, don’t rely on negative gearing to make money for you. It’s the capital gain that does that. Negative gearing only reduces the amount of tax you pay to the taxman. It doesn’t directly increase your wealth.

Good luck

For any investor, the main point is to do your research before you buy an investment property. You need to investigate vacancy rates, rental yields and market price to ensure your property investment gets you good returns.

Choose your property carefully, think twice about off -the-plan purchases and don’t expect negative gearing to make you wealthy. That said, know what you can claim from the taxman. The point is to buy a property to make a capital gain and boost your wealth. But don’t expect huge quick gains as the property market cools, just aim for solid ones.

www.yourmortgage.com.au

If you own or are thinking of buying investment property there are some tax implications you need to know about. The ATO has prepared this list for API.

AUSTRALIAN BUSINESS NUMBER (ABN) AND WITHHOLDINGTAX

You don’t need an ABN if you own a residential property but, if you buy any goods or services for the property and you can’t see an ABN on the invoice, you must withhold 48.5 per cent of the payment for tax if it’s over $50.

So, for example, if a plumber invoices you $250 for repairs to the property and there is no ABN on the invoice, you pay the plumber $129 and send $121 to the Tax Office.

You should get an ABN if you own a commercial property. If you can’t quote an ABN then a business renting the property has to withhold 48.5 per cent of the rent.

GST

Generally GST only affects commercial properties. If you’re registered for GST, you will include GST in the rent you charge and are entitled to claim GST credits for any rental expenses you have paid.

Assuming your only enterprise is the commercial property, you will need to be registered for GST if your gross rent, excluding GST, is more than $50,000 in a year. If your rent is less than $50,000 you can voluntarily register for GST.

If you’re registered for GST and you buy something for the commercial property, you will need to have a tax invoice to be able to claim the GST credits. Similarly, you will need to give your business tenant a tax invoice so that they can claim the GST in the rent.

If you rent to an associate who is registered for GST and the rent is wholly business, the rent will include GST and you will be able to claim GST credits. However, if your associate is not registered for GST or the rent is partly for private purposes, then the GST is based on the market value. If, for example, you rent office space to your son who is not registered for GST and he pays $110 per week while the market value rent is $220 per week, you will account for $20 GST and be entitled to claim any GST credits.

INCOME AND EXPENSES

As well as rent, income from a rental property includes: bond money if you become entitled to keep it; some insurance payouts, such as compensation for lost rent; and profit generated from the use of the rental property.

Expenses include the costs of maintaining the property as well as body corporate fees and charges. The amount you can claim may be limited if you let the property, or part of the property at less than normal commercial rates. If, for example, you allow a family member to use it for free then you won’t be able to claim any deductions for the time they use it.

You can’t claim levies if they are paid to a special purpose fund to pay for particular capital expenditure. Nor can you claim special contributions for major capital expenses to be paid out of the general – purpose sinking fund. You may, however, be able to claim a capital works deduction for the cost of capital improvements or capital repairs once the cost has been charged to the appropriate fund.

Capital works deductions can be claimed over a number of years and relate to certain kinds of construction expenditure and the amount you can claim depends on the type of construction and the date construction commenced.

Other expenses that can be claimed over a number of years include borrowing expenses and amounts for decline in value of depreciating assets.

When you own the property with someone else, rental income and expenses must be attributed to each co according to their legal interest in the property, regardless of any agreement to the contrary.

CAPITAL GAINS

Some expenses you can’t claim as deductions, such as the costs of buying or selling the property, may form part of the cost base of the property for capital gains tax purposes.

Depending on when you bought your rental property, capital gains tax may apply when you sell it. If the property is co owned, each co-owner may have a capital gains tax liability according to their legal interest in the property.

KEEPING RECORDS

You need to keep records of both income and expenses relating to your rental property.

For capital gains tax purposes, you must start keeping records if you purchase or inherit property, receive property as part of a divorce settlement or as a gift, or make improvements to property.

Records relating to your ownership and all the costs of acquiring and disposing of property must be kept for five years from the date you dispose of it.

Records must set out in English the date you acquired the asset, the date you disposed of the asset and anything received in exchange, the parties involved and any amount that would form part of the cost base of the asset.

MORE INFORMATION

The Tax Office has a number of publications that can help you, including Rental Properties and the Guide to Capital Gains Tax which are available at www.ato.gov.au

By doing it differently, with the same income and outgoings, we could help you to get rid of your home mortgage faster. The key to this is where you put your surplus. Lots of people put this in a term deposit or a savings account or even in a non-interest bearing transaction account. Because we do things differently we are able to exceed your expectations.

We will do a personalised analysis for you if you agree to take us as your partner in your financial strategy for eliminating your home mortgage as quickly as possible.

We will look at utilising different finance products to achieve your goal. Remember it is not about the interest rate alone, but it involves using the right product and maximising your tax deductibility of your interest cost if you also have an investment property with a mortgage on it.

Together we will make it work for you. For a free consultation please contact us to arrange for an appointment.

Australians often spend all their time worrying about securing the best mortgage when buying their first home but don’t pay too much attention to what insurance they really need. Louise Goldsbury investigates.

When purchasing property and seeking out the best deal on a mortgage, many buyers overlook insurance. But insurance – whether it’s home and contents, life or disability and unemployment cover – is an essential part of buying and keeping your home.

Lisa Montgomery, National Manager of Consumer Advocacy at Resi Mortgage Corporation, cannot emphasise enough the need to be adequately insured. Having worked in the industry for 22 years, however, she understands it can be difficult to add insurance to the long 1st of responsibilities faced when purchasing property.

“People are so bombarded with information when they are getting their mortgage that when the time comes to consider insurance for the house and for themselves; it gets to the point of overload. Because you don’t need to provide an immediate response to these things, you tend to let them go. But house and contents insurance, life, disability and unemployment insurance are just as important as any other facet of getting your loan, ” Montgomery says.

According to Montgomery, the other problem is that people are often unsure about the amount for which they should insure their property. It’s quite common for purchasers of new property to insure for the amount of the purchase price, which obviously includes the land value, but this is not an accurate method. The best indication of the value of the improvements to your land will be found on your property valuation (usually obtained when you apply for a loan). The valuer almost always gives an indication of insurance value and your lender can provide you with this figure.

“In most cases, your solicitor will also require a copy of your building insurance policy or ‘certificate of currency’ from the insurer at time of settlement. This will need to be correctly endorsed with your lender’s details.

This requirement is extremely important, particularly in the event that you have a total loss and your property is destroyed – it gives peace of mind to not only you, but to your lender.”

A common mistake is choosing insurance according to the price, rather than the features and benefits. “It’s important to read the fine print on your policy, as not all companies are the same, ” says Montgomery. You could be paying top dollar every year and get a nasty surprise when you come to make a claim. For example, during the aftermath of the Newcastle earthquake in the late 80s, a high percentage of people were substantially underinsured. Many of the homes around the epicentre were damaged beyond repair and many owners had not insured their properties enough to cover demolition and rebuilding, leaving them in a difficult position. Often we prepare for minor setbacks, such as broken windows or storm damage; rarely do we consider the chance of a total loss. ”

Contents insurance is also important, but too often dismissed. Most contents policies will provide replacement of possessions in the event of a claim, but it is important to check if there are limits placed on certain items, such as mobile phones, cameras and other expensive gadgets. It depends on the level of insurance cover of each policy as to whether these items are covered if stolen or destroyed outside the home. Of course, this type of “blue ribbon” coverage may come at a premium.

Other types of insurance that are even more commonly overlooked include life, disability and unemployment cover. When taking out a mortgage there are many costs that mount up, so when it comes to making a choice about protecting our family, or ourselves, we often consider it unnecessary and or expensive. But with the average mortgage increasing substantially over the last few years, this type of insurance is as important as any other aspect of the loan process. It is advisable for all new home owners to re -assess their personal insurance cover to ensure peace of mind should any unforeseen event occur. As Montgomery has observed, single people without dependants do not usually consider life cover because they are not overly concerned with what happens if they pass away. But, she warns, it they become unemployed or disabled, servicing their debt could become a serious issue.

Montgomery advises people to research several policies from different companies to ensure they get the most appropriate insurance for their needs and for the best, but not necessarily cheapest, price. “When considering the cost of mortgage protection cover, life insurance is often the least expensive, mainly because there’s more chance of you becoming unemployed or disabled. But your cover shouldn’t be chosen on price. Choose a cover that will complement your existing situation, as well as other benefits you may be entitled to under your current superannuation policy. Don’t pay good money for something that won’t be beneficial in the long run – do your research.

For couples, especially those with children, Montgomery strongly advocates mortgage protection cover and external life cover. ‘If you have an existing life policy, it may cover paying back the mortgage, but not the ongoing financial support needed by your family, so covering the mortgage and your family’s future lifestyle is important.”

Keep in mind that not all lenders provide mortgage protection cover for borrowers, in which case you should do your homework and buy independent cover from an accredited consultant. Salary continuance is one example of cover that has gained in popularity over the past decade. As Montgomery explains, “This type of cover usually pays the individual a percentage of their salary if they become sick or disabled. The cost varies depending on the conditions you choose for your policy. There are several levels of cover and it’s not uncommon for some larger employers to organise a bulk deal for staff to lower the cost.”

Source: Your Mortgage Magazine – February 2005

Like our physical needs, our financial requirements change as we reach different stages in life. In our 20s it’s all about socialising and having fun, our 30s are about creating a solid base and our 40s and 50s are about consolidating and planning for our retirement. The fact that a growing number of Australians are facing a retirement in which they are totally reliant on a government pension suggests this simple formula is not always so easy to put into practice.

Fortunately, it need not be all doom and gloom. Just like your physical health, it’s never too late to put a financial plan in place that will give you a comfortable tomorrow, without missing out on today. Here’s a financial health check list which will help keep you fiscally fit through the different stages of your life.

40s

Many 40-somethings have or are close to paying off their mortgage. This, coupled with the fact that many find their children are starting to leave the nest, can mean that your 40s are a period of greater financial freedom. For the first time in your life, retirement becomes a reality and the need to plan for it becomes more pressing. This is a significant earning period but it’s important not to counter that by making it your peak spending period.

In this period it is important to take stock of your financial position and set a plan in place to rectify any shortfalls before you reach retirement age. Many find at this time that they need to top up or increase contributions to their superannuation fund. For wage earners, this is where salary sacrificing can come in handy.

Top Tips

- Increase life, disability and income insurance

- Increase super contributions

- Continue to build a diversified share portfolio

- Continue mortgage reduction strategies

- Consider using equity in your home to diversify into other investments

- Take care of your physical health

50s

For many this is a period of major lifestyle change. Possible career uncertainty and impending retirement can have major financial and emotional effects. Most people can expect to fund 15 to 20 years in retirement and, after working hard for years, you should be able to enjoy the fruits of your labour. Generally, this is a decade of low financial commitments, high earning capacity and a time when you should be able to commit the maximum available income to your investments.

Top Tips

- Add to your investment portfolio and continue to top up your super

- Maintain income insurance but focus less on life insurance

- Consider risk in relationship to your investment portfolio

- Make sure your will and power of attorney are up to date

60s
It’s time to sit back and enjoy the pay-off from years of hard work and financial diligence. More than ever this is a time when financial decisions are heavily influenced by lifestyle aspirations – perhaps you want to start travelling the world or spend your days soaking up the sun. At this time of life many people also consider moving to a smaller home. It’s important to start re-positioning investments and assets for income rather than financial growth. You’ve worked hard for your money long enough, so now you can enjoy the fact that it’s working hard for you.

Ideally, debt should be eliminated at this point and all large purchases, such as a new car, should be financed debt free.

Top Tips

- Continue boosting super entitlements until you reach retirement

- Vary retirement income streams

- Ensure you have investigated all entitlements such as pension options

- Eliminate life and income insurance but maintain health insurance

- Enjoy life to its fullest

By the Financial Planning Association of Australia (FPA), http://www.fpa.asn.au

This article has been reproduced with the permission of the copyright holder, The Financial Planning Association of Australia Limited, and unauthorised reproduction is strictly prohibited.