What to consider when buying a property? - Ark Sydney Seminar - 15 Spots available!

The Ark Team have analysed the key areas to consider when purchasing an investment property and how to stress less at auctions. To compliment this, they will be a hosting a special seminar on 'How to Purchase Property?' which will cover the important research you need to undertake, how to get the best loan and understanding what it will cost you.

With interest rates at a 20 years low, activity in the property market has increased significantly over the past few months. Last weekend we witnessed record clearance rates in Sydney, with over 80% of the listed auctions selling. In Brisbane, the rate was 65%, which is nearly double the clearance rate this time last year. It is important in times like these to go back to the fundamentals and basics of property and not get caught up in the emotion and media.  We are running a seminar on 'What to consider when buying a property?' and it will cover off the following; - What is the critical research you need to undertake? and how do you do it? - How do you find the right property for you?  - Should you buy a home or investment and what is the difference? - What will a property cost you? - How to stress less at an Auction? - The different tax consequences - including buying in super As an example of some of the content we will cover at the seminar, here are 5 tips on what you need to consider when buying a property; Is it a home or investment? This is the first decision you need to make. Although the purchase might initially be a home and then an investment later it is very rare you find the perfect investment and home in one. You need to understand what your preference is - are you making a lifestyle decision or a financial one? This will help you when you are analysing the property. What can you afford as opposed to what the banks will give you? Yes it is very important to get an approval from the bank about how much you can borrow but it is more important to understand what you can afford. Just because the bank will give you $1million, doesn't mean you can afford that. You need to analyse your cash flow and understand what the cost of the property will be. When calculating the cost of a home, you need to take into account the rent you might be paying. Have you done your research? When we say research, it doesn't just mean the location, amenities and property specifics. You need to make sure you complete your building and strata research to understand if there are any inherent problems in the building such as water leaks, poor strata management etc. You also need to get your solicitor to review the contracts to understand the property in real detail. What structure do you purchase it in? There are several options when purchasing a property - joint names, family trust, super and individually. Each option has pros and cons, and it is dependent on your situation. In some cases, it might be a combination of the above to get the right outcome. The issues you need to consider are tax, estate planning, asset protection and flexibility.  Are you attending Auctions? This can be a very nerve wrecking and stressful time for any purchaser. The key with auctions is to be realistic and be prepared. When you buy at an auction, you need to exchange and pay the deposit on the day of the auction if you are the successful bidder. This means you waive your cooling off period - so there is no going back. This means you need to be prepared well before the auction day. This includes having your solicitor review the contracts, have your building/strata reports completed and have you deposit ready to go. The second part is to be realistic - have your price that you are willing to go up to and if you don't get it then there will be another one. It is disappointing, but unfortunately that is the way auctions operate. Your buying strategy doesn't really matter if someone else is prepared to pay more than what you are.  We hope you can join us for the seminar on Wednesday the 14th of August from 6pm. Click here to regsiter.    Regards, The Ark Team

Craig James - the Australian economy - where 2 now?

Craig James – CBA Commsec's Economist Presented at the CBA Innovation Forum for SME’s on Monday 17 June 2013. A passionate speaker, with a sense of humour!  

The state of play 

• Business is currently quiet, and people are waiting for the election.
• Why the wait ?– the reality is that the government is run by bureaucrat’s, and  financial decisions (interest rates etc) by the reserve bank.
• Massive growth going to come from India and China – we are well placed. 
• Its not all about mining… services, education, tourism, health and infrastructure will continue to drive the economy.

Why are we glum?

•  Election
•  Bad perceived Political Leadership
• We are going through “stuff”  - changing from internet and mobile – changing way we shop – retailers are changing the way we are buying
•  High $ and Australia being expensive compared to rest of world – people are going overseas on holidays – tourism has been suffering
• People have not been lending/ borrowing as much – banking will possibly not be as profitable as in the past

In Australia we are doing ok

We are one of 11 countries with a AAA rating

5.5% unemployment

2.5% inflation

State of our State Economies

Strength of states compared by 8 indicators including retail/infrastructure/ Mining/agriculture

• Mining - WA/NT - growth
• Manufacturing/Finance/ Services - ACT NSW Vic - maintaining
• Agriculture – SA and Tasmania – going backwards 

What about NSW?

• NSW growing faster than in past 12 years
• Unemployment different in different parts
• Inner West 3.5
• Northwest 6%
• Centrals West 6%

Asset Classes in Australia

Property

Home process are doing ok. Sydney  and WA increasing by 4% against an average of 2%

Sharemarket

• Volume deceasing
• USA growing
• A$ profits increasing
•  Returns matter
•  Fully franked dividends – bode well for increase in shareemarket
• People and funds are sitting on a lot of cash , waiting for things to stabilize
• Interest rates low
• A$ - now 95c - expected to go to 85c

Forecast

• Aussie economy positioned well for growth on a number of levels
•  Confidence in economy will change from negative to positive (perception)
•  Agriculture – prime position to take place with
•  Growth will come from building our infrastructure
•  Increase in Services – growth of tourism and services – with a view to increased exports
• Growth of China and India – (on our doorstep) see Hans Rosling’s video on (a brilliant video of the rise of China and India). http://bsivc.blogspot.com.au/2013/06/hans-rowling-rise-of-india-and-chinas.html
• USA is coming off low base of the GFC – Ben Bernancke looking to stop the growth – will possibly increase interest rates, USA$ will increase –

The Numbers

Economy                  2- 3%

Inflation                    2- 3%

Unemployment         5- 6%

Res Property             2- 3%

Sharemarket              5,200

A$                             92 – 95c

Once the election is out of the road – nothing will be holding us back….. bottom line – we are bullish!!

5 things to do to get ready for tax time 6 weeks to go!

1.Take care of the standard little things 

·         writing off bad debts

·         maximising stock valuation outcomes

·         declaration of bonuses and director fees

·         prepayments

·         income deferrals

·         trustee resolutions to appoint income

·         maximising depreciation charges

·         superannuation payments

2. Look for the bigger tax planning opportunities

Beyond thes little things , there may be larger tax planning opportunities that should be considered.

This could include being eligible to claim R&D tax rebates, taking advantage of the loss carry-back rules to get a refund of company tax paid in the last year, and export market development grant eligibility.

All of these opportunities are time sensitive and time limited. The things you do between now and June 30 could make a significant difference in the benefit obtained.

 3. Keep in mind any cashflow implications

This is an essential consideration. Some of the options will require you to spend money, bring forward expenditure or defer income.These will all have cashflow impacts and you need to ensure that creating the best tax outcome does not cause a short-term cashflow problem.

Calculate the funding impact of your choices, and if you need funding support from your bank then talk to them early. You need to map out how much you need, how long you’ll need it for and what is being covered.

4. Are there any risks?

Keep in mind there could be some risks with the decisions being taken. These could include tax, funding and business risks. Tax benefits always need to stack up on the risk-to-reward matrix. Quantify the benefit and assess any risks.

5. Get proper advice

You should take advice on your tax planning. Spend some time with your accountant and map out a plan that works for you.

Things you need to look at when thinking of retirement

In this Ark Informer, the Ark team look at the challenging issues facing pre-retirees. They will be hosting an educational seminar on the Tuesday 19th March  at 12:30pm and the Wednesday 20th at 6pm in March to discuss the issues and possible solutions. Click those dates if you would like to attend. I hope to see you there. If you cannot make the seminar, or you are based outside of Sydney, and you would like a copy of our retirement ebook, please click here and type "ebook" in the message box, and the ebook and notes from the seminar will be sent to you after the event.

Issue No. 05 - Retirement Planning Understanding your retirement options The concept of retirement has changed considerably over the past decade. No longer is age 65 the standard retirement age. Employers are becoming more flexible and allowing employees to gradually wind down their working hours into retirement. To compliment this, superannuation laws have changed that now allow you to access a portion of your superannuation at age 55. Regardless of when you want to retire, there are two important questions that still need to be answered; - How much income do you need to live? - How much assets is enough to fund your lifestyle? Lifestyle is a personal decision, what might be standard for you may be luxury to another. The Seminar Given the dilemna above, we will be hosting a seminar that focuses on the following; - How much is enough for retirement? - How long do you need to plan for? - How you can use your super now to benefit your retirement? - How to reduce tax and boost your retirement benefits? - How to qualify for the Age Pension? Our expert advisors will answer each of the above questions and there will be sufficient time for questions. The seminar is designed to be educational and best of all it is complimentary. The Dilemna How much do you need to live? To determine this, you need to analyse your current expenses. An effecient way to do this is to separate your living requirements into fixed and discretionary. This then creates a baseline of what you need to survive and what is left over for the descretionary spending. What value of assets do you need to maintain the lifestyle above? In an ideal world, you would have enough assets invested to provide you with a passive income to support your lifestyle. This ensures you never run out of money for you retirement.  Unfortunately, this is not the case for everyone. This means you need to implement a strategy over time that will help you get the most out of what you have for retirement. This can include some of the strategies listed below. What strategies can you implement? It is never to early to start planning for your retirement. We have listed some strategies that you can implement before you retire; - Additional contributions to super - Self Managed Superannuation Funds (including using leverage) - Changing the Asset Allocation within your existing super fund - Changing assets to qualify for the Age Pension - Tax reduction Each separate strategy will play a pivotal role in helping you achieve your retirement dreams. If you are thinking of retiring, or you just want to learn more about what options there are in retirement feel free to come along to our seminar on the 19th and 20th of March. If you cannot make the seminar, or you are based outside of Sydney, and you would like a copy of our retirement ebook, pleaseclick here and type "ebook" in the message box.  We will send you the ebook and notes from the seminar after the event. Regards, The Ark Total Wealth Team	March 2013 Seminar Click on the dates below  to register for relevant seminars Tue 19th March @ 12:30pm Wed 20th March @ 6pm Where: Level 7, 14 Martin Place, Sydney Light snacks and refreshments will be provided. Contact Follow us on:
AFSL: 239445 Ark Total Wealth Level 7, 14 Martin Place Sydney NSW 2000 P: 02 9262 3333 E: info@arktotalwealth.com.au

8 Steps to FInancial Freedom

Financial freedom may mean different things to different people, but we all agree that to be truly financially free is to know that should your world crumble around you, that the last of your worries would involve money. 

Very simply, is more money coming in than going out - are you living within your means?

Step 1: Set financial goals

Any trip requires a map with directions – a start and an end point. The road to financial freedom starts with a map and it’s important to understand the journey you are undertaking and why you are doing it. 

Step 2: Get out of debt

Shit happens - if you fall off the rails one month, it doesn’t mean that you should give up. But, the best way to pre-empt such problems is by having a plan in place. Speaking to a financial adviser will also assist you if you are unsure of where to start. www.arktotalwealth.com.au



This has to be a conscious decision and one made in the planning phase. Your plan should outline the ‘bad’ debt you plan on paying off first i.e. clothing accounts, credit cards, overdrafts, etc.

Your plan should also include the order in which debt will take longer than other debt to settle, and when you will start and complete paying off each sum.

Start paying smaller amounts off first as those can be allocated at a later stage to pay off bigger debts. Pay the debts which have a higher interest rate first and whatever extra money you have left over after paying off these amounts, use towards decreasing the longer term debts you may have e.g. car or home mortgages.

Step 3: Start saving

Doing this will benefit you in the long run.  (In fact you should look at consolidating your debts with lower interest rates. see www.liquidityfinance.com.au

If you are tired of having more month than money, it’s time to re-evaluate your spending habits. Yes, we all know how easy it is to overspend one month, stop living beyond your means with the inability to pay back what was spent.

Therefore, if you have paid up all your ‘bad’ debt, then work towards paying extra on your longer term debts which have investment assets against them (Investment Properties or Portfolios).


No matter what your debt is standing at, start paying yourself first. An easy way to ensure that you keep to this self-promise is by opening a savings account that you don’t have immediate access to and save monthly – even if it is $100 for now. 

Step 4: Track every cent you are spending

Place a stop order on the account into which your salary gets paid. This means that the savings amount that you have allocated will go straight into your savings account without you having access to that money. This way, while you are paying off your debt, you are saving and as the debt becomes less, you are able to save more.  

Keep track of every cent that comes and goes. Tracking your spending habits helps you understand exactly how much money comes and goes, as opposed to what you think comes and goes. There are various tools available on the web that can help you do this.

You could also keep a cash log book. This would require you to keep every slip that you get and track it against what you have budgeted. Make this a habit.

Step 5: Draw up a budget

Tracking every cent you spend works hand-in-hand with your budget. Draw up a monthly budget of your income versus your expenditure to track your budget. What you want to accomplish in the long run is to spend less than what you earn especially when debt is involved.

Once your debt is paid up, continue tracking your spending habits and budgeting as they will remain fundamental tools to manage your money.

Step 6: Before investing – do your homework

Before you invest your money in any investment that promises you an unrealistic and quick return – be wary. Good things come to those who wait. There are convincing sales people and con-artists out there. Instead, speak to a registered and accredited financial adviser regarding possible investment options and portfolios available on the market. www.arktotalwealth.com.au 

Step 7: Protect your wealth

It’s vitally important to protect the wealth you create from events that might destroy it, for example, premature death, illness, relationship breakdowns and taxes. Good estate and tax planning will help preserve your wealth and speaking to your financial adviser is key in getting insurance that protects your wealth. www.arktotalwealth.com.au 

Step 8: Set aside for retirement - Build up your Superannuation

If you are young, the last thing on your mind is retirement. However the power of compound interest lies in the secret of your youth – the younger you are the more compound interest favours you. This as opposed to an older person starting to save for retirement at an older stage in their life.

Retirement is an important aspect as you would like to be self-dependent when you retire. A realistic figure that you should be saving is 15% of your salary.

Achieving financial freedom is not rocket science; it just requires determination, focus and a little commitment.

Purchasing Property in your Super Seminar

Ark is hosting its first educational seminar for 2013.

To kickstart the year, we have decided to re-visit one of the most popular strategies from last year - Purchasing Property in your Super.

If implemented correctly for the right people, this strategy has the ability to transform your super and wealth creation. If used incorrectly, it has the ability to cripple your super balance and retirement funds.

In this seminar, we will cover off the following;

- The benefits and risks of the strategy

- The correct structure and common mistakes

- The different ways in which you can structure the loan

- How it can fit into your overall strategy

- The costs of the strategy - Upfront and Ongoing

We will allow plenty of time at the end for questions and to chat with our qualified Financial Advisors. This is one area you need to understand before you make a commitment.

When:- 

Click here to register for Wed 20th Feb @ 6pm

Click here to register for Thurs 21st Feb @12:30pm

Where:-

Level 7 , 14 Martin Place, Sydney 2000 

If you are unable to  make the seminar, just 'Click here and order your complimentary ebook on 'SMSF Essentials' and 'The Process of Purchasing Property in Super' , and we will send it to you after the seminar.

Westpac cuts two year fixed rate home loan to 4.99%

 If you want to review your loan call Danny on 02 9290 2777, or email him on danny.luu@liquidityfinance.com.au

Westpac announced it will reduce its two year fixed rate mortgage to 4.99% (with Premier Advantage Package).  The new offer represents a cut of 0.4% on the current two year fixed interest rate.  The new rate takes effect from Thursday 7 February 2013 and will be available for both new and existing customers.

This places Westpac as a market leader among the major banks and is Westpac's lowest offer on two year fixed rates since April 2009.

Effective Thursday 7 February 2013, the fixed rates will be as follows:

Term	Current Rate (Stand Alone)  % p.a.	New Rate  (Stand Alone) % p.a.	New Rate  (Premier Advantage Package)  % p.a.	Change %
1 year	5.69	5.69	5.49	-
2 year	5.59	5.19	4.99	- 0.40%
3 year	5.59	5.59	5.39	-
4 year	5.89	5.89	5.69	-
5 year	5.89	5.89	5.69	-
6 year (IPL only)	7.00	7.00	6.80	-
7 year	7.50	7.50	7.30	-
9 year (IPL only)	7.50	7.50	7.30	-
10 year	7.50	7.50	7.30	-
12 year (IPL only)	7.60	7.60	7.40	-

Note:  Fixed Rate SMSF Investment Property Loans have changed by the same amount, and remain at
a premium of 0.35% above the standard carded fixed rates.

The comparison table below shows Westpac as the market leader with the lowest fixed rates amongst the majors for 2 and 5 year fixed loan terms:

Lender	1 year fixed rate (packaged)	2 year fixed rate (packaged)	3 year fixed rate (packaged)	4 year fixed rate (packaged)	5 year fixed rate (packaged)
Westpac	5.49	4.99	5.39	5.69	5.69
CBA	5.19	5.29	5.29	5.64	5.69
ANZ	5.34	5.34	5.39	5.84	5.84
NAB	5.24	5.34	5.29	5.64	5.84