The Blogs that appear on this page may be sourced from outdated material so please seek appropriate professional advice. The blog material is in no way intended to be personal financial planning advice.

Catherines Chat

Wholistic Financial Solutions provides a lot of essential information and updates regarding the property investment industry. Check this page for the updates.

Happy Client Testimonial

Tuesday, February 16, 2016

Catherine

Thank you for sending the additional information on property hot spots.  It was a very interesting read (as well as a good quality product) and I think very worthwhile.

I also want to thank you for your time – the Pathway to Wealth session was very useful from a practical sense but also, in terms of giving me a sense of control, confidence and certainty over my short and long term financial futures.

I would also like to commend Lara and Lynda for their professionalism and courtesy

Regards

Ray

What is Financial coaching services

Thursday, February 05, 2015

A new and fast growing advisory service - Financial coaching services

 

Financial coaching definition

 

So what is Financial Coaching?  The industry is so new there is no accepted financial coaching definition.  One can turn to Wikipedia for a definition of Coaching.  Coaching is defined as ‘training or development in which a person called a "coach" supports a learner in achieving a specific personal or professional goal’  So how can this definition be expanded to a Financial Coaching Definition? 

 

Wiki further goes on to outline a sub category of Financial Coaching being ‘an emerging form of coaching that focuses on helping clients overcome their struggle to attain specific financial goals and aspirations they have set for themselves. At its most basic, financial coaching is a one-on-one relationship in which the coach works to provide encouragement and support aimed at facilitating attainment of the client's financial plans. Recognizing the array of challenges inherent in behaviour change, including all too human tendencies to procrastinate and overemphasize short-term gains over long-term wellbeing, they monitor their clients’ progress over time and hold the client accountable. This monitoring function is hypothesized to boost clients’ self-control and willpower. Previous studies in psychology indicate that individuals are much more likely to follow through on tasks when they are monitored by others, rather than when they attempt to ‘self-monitor’. Although early research links financial coaching to improvements in client outcomes, much more rigorous analysis is necessary before any causal linkages can be established. In contrast to financial counsellors and educators, financial coaches do not need to be experts in personal finance because they do not focus on providing financial advice or information to clients.

 

The obvious flaw in Wiki’s Financial Coaching Definition is that it states that financial coaches do not need to be experts in personal finance because they do not focus on providing financial advice or information to clients.  It is correct that Financial Coaches cannot provide Financial Planning advice as they would need to be Licensed Financial Planners to do so. However, I fail to see how a coach can coach someone on their financial life without having any expertise in personal finance issues.  Even the term personal finance is ambiguous.  The term ‘personal finance’ financial management which an individual or a family unit is required to do to obtain, budget, save, and spend monetary resources over time, taking into account various financial risks and future life events.  When planning personal finances the individual would consider the suitability to his or her needs of a range of banking products (checking, savings accounts, credit cards and consumer loans) or investment (stock market, bonds, mutual funds) and insurance (life insurance, health insurance, disability insurance) products or participation and monitoring of individual- or employer-sponsored retirement plans, social security benefits, and income tax management. Are these not highly specialised areas in which advisors need experience, qualifications, registrations and licenses to advise? 

 

To my way of thinking using a ‘Financial Coach’ who has no experience, qualifications, registrations or licenses in financial fields is akin to paying a sports coach who has played football all their life to coach a girls netball team.  Why would you pay financial coaching fees to someone who is not able to provide financial planning advice, tax advice, or finance advice?

 

So who do you turn to for Financial Coaching Services? 

 

If you are seeking financial coaching services or financial coaching packages you would be wise to turn to professionals or a professional advisory firm that are experienced in their field of advice, and licensed, qualified and registered with professional bodies such as NTAA, CPA, FBAA, MFAA, PIPA, PIAA.

 

 

Coaching and mentoring program's

 

So when looking for Financial Coaching Services I think I have made my point clear enough that the individual or business should be experienced, qualified, licenced or registered.  I also think you should be looking for and individual or firm that offers financial coaching software, financial coaching tools and financial coaching packages.   Coaching and mentoring program's can greatly assist you develop wealth creation strategies.

 

Financial coaching fees can be worth paying if the financial coaching fees are paid to suitably qualified professionals whose advice can greatly assist you create personal wealth.  Financial coaching fees can be reduced via subscribing to coaching and mentoring programs and financial coaching packages as these tend to be cheaper than one on one financial coaching services.  However coaching and mentoring programs and financial coaching packages as they are not one on one take more commitment as you have to be self-disciplined enough to follow the coaching and mentoring programs and financial coaching packages.

 

 

What if you are looking for the coaching definition business?

 

If you are seeking financial coaching for business there is once again no accepted coaching definition business. Some business coaches talk about leadership coaching definition, performance coaching definition or executive coaching definition.  But once again nowhere in all these definitions or explanations do you actually find a requirement for a coach who is holding themselves out to be a business coach to be experienced, qualified, licenced or registered.  

 

Personally I would not take business advice from someone who is not, at the very least, a CPA, NTAA of Chartered Accountant and preferably someone who is also a Registered Tax Agent.

 

What is the purpose of coaching?

 

As explained above coaching is ‘training or development in which a person called a "coach" supports a learner in achieving a specific personal or professional goal’. In terms of Financial Coaching Services financial coaching means to coach a client on their personal finance issues which should include topics such as

  • Protection against unforeseen personal events, as well as events in the wider economy
  • Transference of family across generations (bequests and inheritance)
  • Effects of tax policies (tax subsidies and/or penalties) on management of personal finances
  • Effects of credit on individual financial standing
  • Planning a secure financial future in an environment of economic instability

All of these topics require the financial coaching services person or business to be suitably experienced, educated, registered and licensed.  Don’t sell yourself short or waste your money paying financial coaching fees to someone who is qualified only as a life coach.

What to Bring to Your Tax Appointment

Monday, July 08, 2013

Hi all and welcome to the first tax related post for the new financial year.

This time of year we have a lot of people asking us what to bring along to appointments for their tax returns (or email through depending on preference).

Please find below a list of information that we believe should cover most bases when trying to get your documents together.
Please remember though, when in doubt just include it.

Also in this listing are links to our individual schedules and rental property worksheets.

To efficiently provide you with the best service it is beneficial for you to bring the following to your appointment:
o Bank account details (for payment of refunds)

o Previous year’s tax return (if a new WFS client)

o Previous years invoices relating to cost of managing tax affairs (if a new WFS Client)

o Details of interest received.

o Details of dividends received

o All Payment Summaries/Group certificates for the year

o Receipts for (or preferably a summary of) all work related expenses (i.e. union fees)

o Any work related car expenses

o Any work related travel

o Any work related uniform or clothing expenses

o Any work related self-education expenses

o Summary of donations

o    Sale price and Cost base of assets (if disposed of in 2013)

o    Spouse income (if not a WFS client)

o    Summary of child support paid

o Private health fund statement

o Details of medical expenses, if net out of pocket costs exceed $2,120.00
If you intend to claim  please bring:

                o Private health  insurance  summary (of claims, not certificate of cover)

                o Summary of other out of pocket medical expense or receipts for any other medical expenses (not claimed through medicare or private health insurance)

o Any other items that you feel are relevant.

 

For rental properties:
o Please click here to download our rental property worksheet (1 sheet per property, per year)
              The worksheet is optional, but does entitle you to a 15% discount  if completed correctly.

o Details of all rent received – (rental property management annual summary preferred)

o Details of all expenses including interest

o  Property address and date first earned rental income (if first year with rental property)

o Depreciation report (or list of all capital  expenses)

o Any other items that you feel are relevant.

 

If you wish to email through your information, please use our individual schedule. You can download it here.

Top 10 smart money tips for 2013

Thursday, January 03, 2013

Top 10 smart money tips for 2013

Don't let another year go by without sorting out your money. Here are the top ten things you can do to make 2013 really count.

1. Set your savings goals

Identify some specific, realistic saving goals and put them up on your fridge so you see them every day. See our saving tips on creating achievable goals and how to make them happen.

2. Talk turkey with your partner

Talk to your partner or family about your financial goals and what you want to achieve together so you are on the same page. Together you can put a plan into action. See relationships and money.

3. Automate your savings

Open a separate high interest savings account and set up an automatic transfer for a fixed amount each pay. That way your money will grow and you can enjoy the rewards faster. See direct debits and savings accounts.

4. Tackle your credit card debt

If you've got a credit card debt, treat it as a priority. Repay more than the minimum required each month. Money Smart's credit card calculator can help you work out how to reduce your debt faster.

5. Spend your own money

A debit card might be better than a credit card as it only uses money in your account. It's a great way to make you think before you spend. See debit cards for more.

6. Keep tabs on your daily spending

Download MoneySmart's 'Track My Spend' app and see what you really spend each day. Once you know where your money's going, it's much easier to see where and how, you can save money.

7. Get up close and personal with your super

Super is your money. Make sure you know where it is and how much you've got. If you've got super in different places, think about consolidating it into one fund. There will be less paperwork and it's easier to see how your super is growing. See consolidating super funds.

8. Get ahead while rates are low

With interest rates so low, a great way to get ahead is to keep your repayments the same as they were when rates were higher. It's effectively like making extra payments into your mortgage. If you keep that up you can save thousands in interest and cut years off your loan. More on making repayments.

9. Check what your insurance really covers

Don't just think about price when you are buying insurance. Make sure you have the right type and level of insurance. If you do need to make a claim, it'll be what your policy covers that matters most. See insurance for more.

10. Take your money's temperature

Do our Money Health Check - it will tell you where you are doing well and where you could do better. Devise a clear money plan and make 2013 your best year yet.

https://www.moneysmart.gov.au/tools-and-resources/news#Topten

Negative gearing for property investors makes good economic sense: Cameron Kusher

Friday, December 28, 2012
n its most simplistic form, negative gearing for investment housing allows investors to deduct their losses against their personal taxable income.  These losses may occur when the investor incurs costs such as interest on a home loan as well as maintenance and other small expenses on an investment property. However, it is important to note that negative gearing is not unique to the property asset class; it also applies to businesses and shares in Australia.

The most important thing to realise about asset negative gearing is that it is fundamentally offsetting a loss.  Although you can claim that loss on your tax return, the investor must carry the cost of that loss throughout the year.  Ultimately, when investing, most purchasers would be hoping that rental rates increase over time and result in the asset moving from a loss-making one to an income-producing one.

It is also important to note that between September 1985 and September 1987, negative gearing laws were changed.  The government quarantined negative gearing interest expenses on new transactions.  As a result, investors could only claim interest expenses against rental income, not other income.

Given that negative gearing provides a benefit to investors, we look at the impact these changes had on the investment market over the two-year period.  The first component is the impact the changes had on the rental market.

According to the rental component of CPI data, rents across the capital cities rose by 21.8% over the two years to September 1987 (the period during which negative gearing laws were changed).  The increase in rents was most pronounced over the period in Sydney (26.1%) and Perth (31.1%).  As a comparison, over the two years to September 1985, rental costs rose by a lower 17%.

Click to enlarge

The data clearly shows that rental growth was present over this period and it was greater than it was over the two-year period directly preceding it (The above chart shows the period for which the negative gearing rules were changed and are bolded black).  Here you can see that rental growth was well above average, particularly recent averages, but it was not unprecedented, with rents growing by a greater amount on an annual basis in late 1982 and early 1983.

Another important determining factor is the demand from investors over this period.  Unfortunately the Australian Bureau of Statistics does not provide information on the number of loans to investors; rather it provides the total value.  The total value of investment finance commitments in September 1987 was 41.5% higher than in September 1985.  These figures seem to suggest that at that time there was no weakness in demand for investment housing, however, a clearer outcome would be apparent based on the number of loans rather than the value.

The reason why negative gearing was reinstated in September 1987 was that it was proclaimed that rents rose sharply on the back of a fall in housing market investment.  However, it doesn’t look as if investment in the housing market dried up throughout this period. Rents clearly did rise quite sharply throughout, as demonstrated.

 

Many in favour of removing negative gearing from property say that it should occur due to the fact that housing is an unproductive asset class.

My argument is that given that housing provides shelter, if investors don’t purchase these assets, it would then be the responsibility of the government to provide this shelter.  Ultimately, that would mean that anyone that pays taxes would be funding housing for those who can’t afford it themselves.

One of the arguments against negative gearing is that the tax deductions afforded to investors in the housing market reduces government revenue.  However, if investors did not provide shelter to those who can’t provide it to themselves, government revenue would already be reduced due to the fact that this responsibility would fall on the government.

If we look at the recent Australian Bureau of Statistics (ABS) dwelling approvals data, it is interesting to see just how much of the new housing supply is created by the private sector as opposed to the public (government) sector.  According to the ABS dwelling approvals series, which began in July 1983, between July 1983 and October 2012, 4,355,266 dwelling approvals have been given to the private sector compared to just 228,843 to the public sector.  Over the last 29 years (give or take a few months), public housing approvals have accounted for just 5% of all dwelling approvals.  This is less than 8,000 approvals by the public sector each year!

Over the 12 months to October 2012, 145,515 dwellings approvals were granted to the private sector (98.6%) compared with just 2,065 to the public sector (1.4%).

The most recent census data shows us that of those homes occupied, 29.6% are rented (investment properties).  Based on this data, if we assume that without the private sector building homes for investment purposes, the public sector would have to account for 29.6% of all dwelling approvals to cover those in rental accommodation.  Over the past 12 months this would have equated to 43,684 dwelling approvals.  If we also consider that the median home price across Australia as at October 2012 was $386,000, and if the government had to buy the land and build 43,684 homes, this would cost the Government of the day $16,861,900,480 based on the number of approvals and the median home price.

Of course this is a rather simplistic calculation and if the government were to build homes on its own land it would cost less, as that figure includes land and building.  Also, it is unlikely that private investment in residential housing would cease without negative gearing but I would expect that it would fall.

The most recent taxation statistics data shows that over the 2009-10 financial year, $4.81 billion in net rental deductions were claimed by taxpayers.

rpdec172

In order for the government to break even to allowable deductibles from tax returns they would have to be building those 43,684 homes at a cost of $110,100.  Based on the current median home price across the country at $386,000, they would have only been able to build 12,461 homes over the past 12 months or 8.4% of the total building approvals over the past year.  It should be noted that not all new builds are for investment purposes but if we assume that 29.6% are there is a significant shortfall.

When you look at these figures it is obvious why negative gearing is unlikely to be removed.  Whether the removal of negative gearing impacted investment or not, and whether it lead to an increase in rents is a secondary concern relative to how much it would cost the government to supply public housing for the almost 30% of Australians that don’t own their own home.

These figures are not to suggest that if in the case negative gearing was removed, there would be no investors in the market however, the appeal of negative gearing is part of what attracts many investors to the market.  Without negative gearing it is likely that there would be fewer investors and therefore less private developers delivering new homes coupled with a greater need for the public sector to provide housing.  The flow on effect may also be that there would likely be lower demand for housing credit.  Although some proclaim removing negative gearing would cause house prices to fall, I would expect that new housing supply would be even tighter as developer’s struggle to achieve pre-sales for new development, this may in-turn force prices higher than they otherwise would be.

By looking into the figures in more detail, it makes good economic sense for the government to allow housing investors to negatively gear their properties so that the significantly greater cost of providing social housing is not borne by the Government and ultimately the Australian taxpayer.

Cameron Kusher is senior research analyst at RP Data.

 

Positive signs for 2013 Property Market

Friday, December 28, 2012

Mortgage industry bigwig John Symond has tipped a gradual improvement in the housing market in 2013 and for interest rates to fall further.

“I am pretty confident the housing market throughout the country has bottomed out,” he says.

Symond believes there will be a “very gradual increase in [property] values across the board”, but not the 15% or 20% annual spike that occurred pre-GFC.

“I believe the property market will now head into a healthy state of growth with only gradual increases and that is on the back of low interest rates,” he says.

He is also starting to see a return of property investors to the market due them having the “greatest choice in the number of properties on the market in Australia’s history” combined with the low interest rates.

“I am confident we will see a healthy gradual improvement in housing across the country and I believe the regional centres will see that increase as well because overall Australia still has a shortage of housing,” he says.

Symond says he also expects interest rates to head lower in 2013.

Flood of activity' still coming in QLD

Wednesday, December 05, 2012

MORE than 13,000 machine operators, 6000 graduates and more than 7000 tradies will be needed by 2015 to keep Queensland's mining industry ticking over.

Skills researcher Kinetic Group's boss Derek Hunter concedes these are "uncertain times", but said a flood of activity was still headed our way.

"If you stop looking at the headlines and look at what the activity in the industry is right now, it's as high if not higher than it has ever been," Mr Hunter said.

"We have got significant new growth in productivity from 2013 onwards."

As of April, there were 20 mining and gas projects in Queensland alone, amounting to more than $64 billion in investment.

That includes BHP Billiton's Caval Ridge and Daunia mines already under construction which will deliver a total of 2450 jobs in construction and during operations

"These are not pie in the sky figures - the companies already invested are unlikely to stop them going through to production unless there was the most amazing crash."

He noted that even the global financial crisis, though it created a few "blips" for the industry, had only mild long-term effects.

Mr Hunter said the danger was this boom to bust mentality, if something stopped booming, then surely it had bust.

"We have to change people's heads about that - companies have shareholders to satisfy so action must be taken as soon as there is difficulty.

"Certainly (BHP Billiton Mitsubishi Alliance) is laying people off, they have closed a couple of mines in the past few months.

"But they have absorbed most of them back into the organisation."

Mackay's Northern Beaches booming

Wednesday, December 05, 2012

IT'S still a wise move to invest in Mackay's housing market and the Northern Beaches will be a buyers' hot spot.

This is the opinion of Xcel Properties managing director developer Kim Clarke.

Xcel Properties released more house and land packages to market at its popular master-planned estate Plantation Palms recently.

"The city is struggling to keep up with its growing population - 1500 new homes needed to fill the demand every year," Mr Clarke said.

"With all the uncertainty the market did slow down for a couple of weeks, but that was Australia-wide.

"In the last few weeks we have seen it pick up again, particularly in Mackay."

Despite a drop in consumer confidence, Mackay was still a worthy choice for investment, Mr Clarke said.

"I think one of the things that impressed in the most about the Mackay city, is its strong economy.

"It has strong agriculture, strong manufacturing in Paget, and then the businesses that are servicing the surrounding mines."

Northern Beaches is one of the fastest-growing areas in Mackay and Mr Clarke said that was about to ramp up as major projects came online.

"There is the new school, it's close to the shops and eventually there will be bus routes and cycle ways that link up to the shops and beaches," he said.

"People living in Plantation Palms will be able to walk, or cycle if they prefer, to school and to the shops."

Mr Clarke said the area was unique because the majority of the land was bought off a sole owner.

"The Symons family owned the whole area years ago... we are able to work with the Mackay Regional Council to think about the planning of the estate and the area."

The new packages are part of the Stage 3B and comprise 46 lots from 535 to 881sq m. They are priced between $199,000 and $285,000.

Mr Clarke said the range of people looking to buy the packages was broad, but he noticed a strong trend in buying smaller lot sizes.

"There seems to be a lot of older couples who are looking to downsize," he said.

"But the first-home buyers, which are generally your young married couples, are looking that to go that way as well.

"First-home buyers usually want to invest between $380,000-$440,000 mark.

"But in saying that, there will always be people wanting to buy the bigger blocks with the larger manor homes as well."

What's available?

 Stage 3B comprises 46 lots from 535 to 881sqm,

  Prices range between $199,000 and 285,000

Thousands needed to run mines

Wednesday, December 05, 2012

MORE than 13,000 machine operators, 6000 graduates and more than 7000 tradies will be needed by 2015 to keep Queensland's mining industry ticking over.

Skills researcher Kinetic Group's boss Derek Hunter concedes these are "uncertain times" but said a flood of activity was still headed our way.

"If you stop looking at the headlines and look at what the activity in the industry is right now, it's as high if not higher than it has ever been," Mr Hunter said.

"We have got significant new growth in productivity from 2013 onwards."

As of April, there were 20 mining and gas projects in Queensland alone, amounting to more than $64 billion in investment.

That includes BHP Billiton's Caval Ridge and Daunia mines already under construction, which will deliver a total of 2450 jobs in construction and during operations.

"These are not pie in the sky figures - the companies already invested are unlikely to stop them going through to production unless there was the most amazing crash," Mr Hunter said.

He noted that even the global financial crisis, though it created a few "blips" for the industry, had only mild long-term effects.

Mr Hunter said the danger was this boom to bust mentality, if something stopped booming, then surely it had bust.

"We have to change people's heads about that - companies have shareholders to satisfy so action must be taken as soon as there is difficulty.

"Certainly (BHP Billiton Mitsubishi Alliance) is laying people off, they have closed a couple of mines in the past few months.

"But they have absorbed most of them back into the organisation."

Daunia

  • Open cut mine, 2960 hectares
  • Production expected to begin next year
  • Full production of 4.5 million tonnes per annum expected in 2014
  • 1000 employees required in construction phase, 450 during production
  • Caval Ridge
  • Open cut mine, 6706 hectares
  • Production expected to begin in 2014
  • Full production of 5.5 million tonnes per annum expected
  • 2000 employees required during construction, 500 during production

Flood of activity' still coming in QLD

Wednesday, December 05, 2012

MORE than 13,000 machine operators, 6000 graduates and more than 7000 tradies will be needed by 2015 to keep Queensland's mining industry ticking over.

Skills researcher Kinetic Group's boss Derek Hunter concedes these are "uncertain times", but said a flood of activity was still headed our way.

"If you stop looking at the headlines and look at what the activity in the industry is right now, it's as high if not higher than it has ever been," Mr Hunter said.

"We have got significant new growth in productivity from 2013 onwards."

As of April, there were 20 mining and gas projects in Queensland alone, amounting to more than $64 billion in investment.

That includes BHP Billiton's Caval Ridge and Daunia mines already under construction which will deliver a total of 2450 jobs in construction and during operations

"These are not pie in the sky figures - the companies already invested are unlikely to stop them going through to production unless there was the most amazing crash."

He noted that even the global financial crisis, though it created a few "blips" for the industry, had only mild long-term effects.

Mr Hunter said the danger was this boom to bust mentality, if something stopped booming, then surely it had bust.

"We have to change people's heads about that - companies have shareholders to satisfy so action must be taken as soon as there is difficulty.

"Certainly (BHP Billiton Mitsubishi Alliance) is laying people off, they have closed a couple of mines in the past few months.

"But they have absorbed most of them back into the organisation."


Discover How to Build A Property Portfolio The Right Way Right From The Start

Recent Posts


Tags


Archive