Where Would You Like To Be At 65?


Most Australian’s can’t afford to retire when they want.

The pension is $356 per week – just $30 above the poverty line.

Plus, Australian’s are living a decade longer than the average age in 1975, so we need a larger retirement fund to support us for a longer life expectancy.

Can You Survive Retirement?

How We Help

Free Financial Planners is a referral service to help people achieve a wealthier future through different methods while removing the common obstacles of affordability, time, risk, and knowledge.

Not just property

We are linked to certified financial planners and licensed real estate agents – giving us the resources and expertise to assist with:

  1. Multiple investment options
  2. Tax planning strategies
  3. Financial planning
  4. Financing opportunities
  5. Tax minimisation
  6. Mortgage reduction
  7. Refinancing
  8. Risk management
  9. Creating Self-Managed Super Funds
  10. Setting up Trusts
  11. Present and future financial independence
  12. Minimise tax exposure
  13. Reduce current debt
  14. Build wealth
  15. Choosing the best performing investment properties
  16. Implement risk management strategies

 


Common Obstacles to Wealth


 

Obstacle 1: Inflation

Whenever you save money, even if you earn interest, it’s actual spending value decreases over time and you don’t end up with any more than when you started, in fact it’s usually less.

This begs the question – what’s your super really worth? How far will it go when you retire?

Obstacle 2: Dead Money – Tax

How Much Tax Will You Pay In Your Remaining Work Life?

Current Threshold 10 Years 20 years 30 years 40 years 50 years
$20,000 $3,420 $6,840 $10,260 $13,680 $17,100
$30,000 $22,420 $44,840 $67,260 $89,680 $112,100
$40,000 $45,470 $90,940 $136,410 $181,880 $227,350
$50,000 $77,970 $155,940 $233,910 $311,880 $389,850
$60,000 $110,470 $220,940 $331,410 $441,880 $552,350
$70,000 $142,470 $284,940 $427,410 $569,880 $712,350
$80,000 $175,470 $350,940 $526,410 $701,880 $877,350
$90,000 $212,470 $424,940 $637,410 $849,880 $1,062,350
$100,000 $249,470 $498,940 $748,410 $997,880 $1,247,350
$110,000 $286,470 $572,940 $859,410 $1,145,880 $1,432,350
$120,000 $323,470 $646,940 $970,410 $1,293,880 $1,617,350
$135,000 $378,970 $757,940 $1,136,910 $1,515,880 $1,894,850
$150,000 $434,470 $868,940 $1,303,410 $1,737,880 $2,172,350

sourced from www.taxcalc.com.au

Obstacle 3: Dead Money – Interest

How Much Interest Will You Pay On Your Loan?


On a traditional mortgage, the amount of interest you end up paying is more than double the amount borrowed – and usually takes 30 years to repay.

That’s a big chunk out of your equity…

Obstacle 4: Deposit

OK so let’s say you know all this and want to buy an investment property but getting the deposit is an issue? Read on for some solutions below.


Overcoming the Common Obstacles


Overcoming Obstacle 1 – Inflation

Putting your money into something that increases in value is a way to stay ahead of inflation.

There are various ways to do this, and you can discuss it with our financial planners free of fees. Property is one of the favourite ways because it is a very passive type of income, plus it’s an actual roof over your head for generations.

Overcoming Obstacle 2 – Tax

Would you agree that taking advantage of tax rebates rather than let them go to waste makes better financial sense?

There are varied tax rebates available when purchasing new property for investment, in fact they can go towards paying up to 20% of the entire property. Normally this tax is money going nowhere but the Australian government has created this incentive to be invested towards your retirement.

Overcoming Obstacle 3 – Interest

Restructure Your Loan To Save Time And Money


Most people are aware that getting a lower interest rate will help, but a lower interest rate isn’t enough compared to getting a different type of loan or restructuring into a new type of loan.

Free Financial Planners will refer a licenced Credit Representative to see which product, if any, would best suit your needs.

Overcoming Obstacle 4: Deposit

If you want to buy property but don’t have enough savings for a deposit there are other sources that won’t leave you out of pocket.

  1. If you are already paying off a mortgage or own your own home, then your equity can be used as a deposit.
  2. If you are renting, you may be able to use your Super.
  3. If you can’t afford property in either case but interested in making your money go further in other ways, there may still be some hope.

Talk to one of our financial planners to discuss which option is right for you.

Funding Your Retirement With Property

The average increase to house prices in Australia has been 7.25% per year.



(figures rounded down for illustration purposes)
The equity alone on just 2 properties can be enough to retire on in 15-20 years, unfortunately that equity is normally gobbled up by the interest by then. That’s why it’s important to have the right loan structure as well as the lowest interest rate.

Pay For It Without Your Own Money?

You don’t need to be out-of-pocket to buy an investment property – in fact they may be able to pay for themselves or pay you a passive income depending on the property you buy and your financial situation.

This is a common scenario:

  • Use current equity or super for the deposit
  • Your tenants pay around 70% through rent
  • The tax man pays around 10-20% through tax reductions
  • Your savings on interest or loan restructuring could pay the remaining 10%

 

Even If You Have Pay A Little?

You could still have a house and land in the end for a fraction of the normal price compared to paying for it entirely yourself and not utilising any investment strategy.

To put it another way, lets say the best scenario you could get for your situation is paying $30/week towards the investment property. Compare that with putting $30/week into a savings account for 25 years, and for arguments sake we’ll use a hypothetical return of 5%/pa for both investment property and term deposit interest.

If you put away $30/week every week for 25 years into a hypothetical fixed 5%/pa savings account, you would have $70,574 ($36,000 invested + $34,574 interest) – or roughly 2x the amount you contributed.

If you purchased a $350,000 property, to which you had to contribute $30/week for the repayments and it didn’t increase in value at the end of 25 years, you would still have an asset that you could sell for $350,000. Minus your contribution plus fees and taxes etc upon sale should leave you with around 8x the amount you contributed. However assuming 5% increase per year in this example compared with the term deposit, its sale value is now $1,185,224 – around 30x the amount you contributed.

Why Investment Property Is Australia’s Most Popular Investment

  • Secure and reliable
  • Easy to understand and manage
  • Very tax effective
  • Usually paid for by someone else
  • Can provide inflation-proof income for life

Steps To Successful Property Investment

Properties are researched by a group of experts to be a successful investment based on:

  • Price to value
  • Potential growth location
  • Rental income / yield
  • Insurance for loss of rental income or damage by tenants
  • Property management
  • Maximum re-sale value

Making sure the above boxes are ticked can be a lengthy and risky process.

A clearer path, free of fees

Why risk 100’s of hours of time and vast sums of money when you can get experts to help without charging you?

Some financial planners can also help you protect your assets through setting up a trust, create better performing self-managed super fund, restructure loans or determine if other investment strategies would best suit you. They are bound by law to only present a solution or property if it is in your best interests.

Get a financial planning process designed for you, whether that’s property or other strategies,
and receive advice and pitfalls on all wealth creation opportunities that interest you.

Request a Free In-Home Appointment

Disclaimer

The advice provided on this website is general advice only. It has been prepared without taking into account your objectives, financial situation or needs. Before acting on this advice you should consider the appropriateness of the advice, having regard to your own objectives, financial situation and needs. If any products are detailed on this website, you should obtain a Product Disclosure Statement relating to the products and consider its contents before making any decisions. Where quoted, past performance is not indicative of future performance.

Free Financial Planners disclaim all and any guarantees, undertakings and warranties, expressed or implied, and shall not be liable for any loss or damage whatsoever (including human or computer error, negligent or otherwise, or incidental or consequential loss or damage) arising out of or in connection with any use or reliance on the information or advice on this site. The user must accept sole responsibility associated with the use of the material on this site, irrespective of the purpose for which such use or results are applied. The information on this website is no substitute for financial advice.