We all get bombarded with information from every source possible and frankly, it's too much. Even if you haven't already flicked it into spam you probably don't have time to read it. We call it Information Overload. So, on this page we've selected big picture news items we think are relevant and of interest to our clients.
The key lessons for investors from the GFC are:
1. There is always a cycle. Talk of a ‘great moderation’ was all the rage prior to the GFC but the GFC reminded us that long periods of good growth, low inflation and great returns are invariably followed by something going wrong. If returns are too good to be sustainable they probably are.
A surge in commercial rental property increases during 2017/2018 has caused business owners and employers to look at various space saving options like relocating the office to home or giving employees “work from home” days.
The advantages of a home based office include reduced costs, tax savings, being able to work in your slippers, be home for sick kids and no commuting to the office.
Whether its cutting the costs of expensive city office rents or staff retention or both, employers implementing “flexi roles” or “work from home days” can benefit from hot-desking.
It’s not uncommon for members of a couple to have very different super balances. Depending on a person’s age, income, working days and level of salary sacrifice, there will usually be one member with a much greater balance than the other, often more than double.
Previously there was actually nothing wrong with this and having unequal balances was perfectly fine. That’s because the size of your super fund did not matter in terms of tax and annual contribution rates were capped at the same amount regardless of balance.
There has been a lot of debate over the years about whether active fund managers add value, or whether you are better off investing into a low-cost alternative such as an index fund or exchange traded fund (ETF).
The reality is not as simple or clear-cut as the marketing teams on either side make it out to be. You need to be very careful about what you invest in, and therefore make informed decisions.
As tempting as it is, loaning money to family and friends is fraught with danger. The interest rate may be low, but emotional costs can be high. Getting the right documentation in place is the best protection.
At our most calm and logical, most of us would say that lending money to friends is rarely a great idea, and lending money to a family member is among the worst of ideas – but calmness and logic are not what most families are about.
Last night the Federal Government handed down the 2018-19 Federal Budget. The centrepiece of the Budget was a seven-year personal income tax strategy, beginning with reductions for low and middle-income earners in the 2018-19 year. It also focused on reining in spending, tax cuts for small to medium enterprises, and on assisting older Australians.