There are many reasons you might purchase a home later in life: perhaps you’re starting fresh post-divorce, or you own a home and have decided to buy a second property to help out your kidults.

Regardless, it comes down to the same thing: knowing what you’re getting into and being ready.

Buying later presents opportunities that younger house-hunters overlook as proximity to schools and playgrounds isn’t so important.

On the flipside, if later-life home-ownership figures in your future, you should be working with your financial adviser now – and here’s why.

Time

Our population is living and working longer. We can save more towards a home with longer to pay it off. But really, do you want to be stuck with mortgage repayments chewing through your income – after retirement?

What if you purchase just before retirement? Servicing a loan is relatively easy while gainfully employed, particularly with record low interest rates. Bad news is they won’t stay low forever. Rising interest combined with reducing income can quickly turn the dream into a financial nightmare.

Job security

According to the Australian Institute of Health and Welfare (AIHW), in the period 1984 – 2014, labour force participation of Australians aged 55 – 64 grew from 41% to 64%. Good news. The Australian Bureau of Statistics (ABS) for the period 2002 – 2010, reports “declining levels of full-time employment” among the same age group indicating greater numbers of older Australians working fewer hours.

Not so good. With fewer full-time job opportunities for those aged over 55, if you’re still considering a pre-retirement mortgage, be aware of:

Compromises

If your retirement goals include travel, hobbies or even a weekly round of golf, servicing a mortgage may overburden your budget, forcing you to cut back your spending and lifestyle.

Regardless of home ownership, the Australian Centre for Financial Studies (ACFI) reports that 20% of retirees’ average household expenditure exceeded income, leaving no alternative but to draw on savings or liquidate assets just to live.

Now, throw a mortgage into the mix …

Ongoing maintenance

Be realistic about your budget and your shopping list. Consider what mod-cons you genuinely need. And size does count! If, down the track, you can’t physically maintain your home, could you afford gardeners, cleaners, etc, while repaying a mortgage?

Superannuation

Ah, that warm glow lighting our path to retirement. You could use your super to buy a house but what will you live on? The age pension? Will that fund your desired lifestyle?

To quote the ABS, “… key factors will be people’s plans as they get older, including when and how they intend to retire and what factors will influence their decisions.”

We don’t always agree with government reports, but in this it’s spot-on.

Our longer life expectancy means retirement planning is more important than ever. Talking with your financial adviser as early as possible will help you set up a strategy for living – to retirement and beyond!

For more information about purchasing a property or retirement strategy, please call Leenane Templeton on (02) 4926 2300 or email success@leenanetempleton.com.au

The post Purchasing a property later in life appeared first on Newcastle Financial Planners & Financial Advisors.

If you are a parent of a teenager or a pre-teen, take heart – communicating with them is probably just as hard as it was for your parents to get through to you! And before you start to argue, remember back to when you felt that you weren’t being “understood”?

The good news is that you are not alone and the better news is that there are ways and means of communicating with people who think that grunting is a highly evolved form of communication.

The stages

These are the generations of the last century that researchers, marketers (and parents) are focusing on (or dealing with!). 

• 1920 – 1945    Veterans/Builders
• 1946 – 1964    Baby Boomers
• 1965 – 1979    Generation X
• 1980 – 1994    Generation Y
• 1995 – 2009    Generation Z
• 2010 +    Generation A (Alpha)

Let’s focus on the most talked about category – Generation Y – well, that’s until we see what Gen Z has to offer!

Who are these people… and Y?

In actual fact, if parents and employers of Gen Ys would stop and watch the behaviours of these young people, we might find that they have a great deal to teach us.

Consider their qualities:

• Self confident, optimistic
• Quick decision makers
• Comfortable with technology and tradition
• Entrepreneurial
• More savvy
• Take risks but don’t look back.
• No fear!

How to communicate with them?

Our own parents probably pondered the same question; however given the unique qualities of this generation maybe they have more to teach us than we think. Parents (and even grandparents) who show an interest in technology and learn how to use the internet, email and SMS will have a greater advantage of reaching their offspring, even if it does mean sending an SMS to tell them that dinner is on the table! 

Australians aged under 25 have never had to deal with a major catastrophe such as World Wars or long-term global depressions (no, the GFC doesn’t come close). Sure, getting a job might be more difficult but in many cases, because of their close relationship to technology from a very young age, they are more likely to start their own businesses. They will take risks and if they lose the lot, they usually dust themselves off and have another go. Stress is something they deal with, embracing change instead of fighting it. 

Of course, this doesn’t apply to all people in this generation, just as the attributes of a star sign don’t apply to everyone born on a certain date, but it does give you food for thought when you witness the actions of this noisy generation. And just remember, they will become parents to Generations Z and A!

Sources:
www.youthengagement.sa.edu.au
www.learningtolearn.sa.edu.au “Understanding Gen Y”
www.qtic.com.au “Generation Y profile”
White Paper – Seriously Cool: Marketing and communicating with diverse generations – McCrindle Research
www.news.com.au  Babies born from 2010 to form Generation Alpha

Call (02) 4926 2300 or email us. 
Leenane Templeton are here to help with any questions you may have in relation to your finances. 

The post Learning from our youth appeared first on Newcastle Financial Planners & Financial Advisors.

If you’ve been keeping up with news lately you’d hardly be surprised to notice that Australia is facing a preventable health crisis with two in three of us currently overweight or obese.  In Australia, while chronic disease is the leading cause of death and disability, these health challenges affect all sectors in Australia, including the provision of financial advice.

Given these statistics, one might assume that Australians would be working overtime to improve their health, but sadly this does not appear to be the case. Many of us, when faced with a decision about whether or not to eat a fruit salad over a sweet treat, often decide to take the short-term reward of enjoying a tasty treat, despite the long term health consequences that may result from doing so.

So, what can we do to get Australians more motivated to improve their health, particularly with the festive season fast approaching – while a significant time for Australian families to celebrate, it’s also ultimately a time that many put on weight.

AIA Australia conducted a survey of 1,300 Australians aged between 25-45 years to find out what it is that ‘turns us on’ and also prevents us from improving our health, including exercise and eating well. The research revealed that nearly 90 per cent of us wish we were more motivated to create and sustain a healthier quality of life, but that crucial willpower alone is not enough to sustain healthy habits.

Three-quarters of Australians found that rewarding themselves when reaching their fitness goals successfully motivated them to get off the couch. Eating something tasty, as a reward after a workout session, was the most popular source of exercise motivation, favoured by 40 per cent of both men and women.

Looking at the results, it is clear that Australians need to find their own personal motivational techniques to get healthier. From wanting to look good at a friend’s wedding, or being able to keep up with the grandkids, everyone has a different motivator that needs to be harnessed.

No one is immune to the health challenges Australia faces. Many private sector organisations can play a role in helping solve our soaring obesity and chronic disease rates. By tapping into what can motivate and incentivise each of us to improve our health, we can have a better chance of overcoming this crisis.  

Source: AIA, October 2014

Speak to your financial planner to discuss your health insurance options.
Call Leenane Templeton on (02) 4926 2300 or email us.

The post Australians need a little help to battle the bulge appeared first on Newcastle Financial Planners & Financial Advisors.

Generations of Australians have been brought up with the concept that they should own their home. In fact, “dead money” is an expression often used to describe renting. However, in many other countries home ownership tends to be less common. So what is the best option for Australians – to buy or rent?

The answer really depends on your personal circumstances, financial objectives and your ability to make prudent financial decisions.

Paying off a mortgage provides a means of forced savings – a level of savings, which many people would not have the discipline to achieve if it were voluntary, whilst building an asset. Alternatively, to make renting your home a financial success, it is most important that the same level of saving is applied. Money, which would have gone to paying off a mortgage, should be applied to a strategic investment plan.

When you rent your home, the outlay on rent is invariably less than the combination of mortgage payments, rates, insurance and maintenance, so the difference should be applied to an investment portfolio.

Some other considerations include:

• If you also use borrowed funds for the investment portfolio, you may well achieve a higher after-tax return than paying off your home.
• The cost of buying and selling your home is considerable after allowing for stamp duty, agent fees and legal costs. So if you move frequently because of your job or lifestyle, renting may be the answer.
• When you rent, the owner is responsible for all costs such as rates, repairs and maintenance. If the termites attack it’s not your worry!

On the other hand, you do not benefit from the capital appreciation of a rental home. So it all comes down to personal circumstances, and there may be periods when both strategies are appropriate.

Our accountants and financial planners are available to discuss the pros and cons of home ownership and renting, the impact it may have on you financially and your short and long term goals.
Call (02) 4926 2300 or email us.

Disclaimer

Call Leenane Templeton today if you are struggling with the age-old question we all face – to buy or rent?

The post The age-old question: to buy or rent? appeared first on Newcastle Financial Planners & Financial Advisors.

“Serenity Now!”(1) and “Peace, be still”(2), might be mantras we vocalise or silent pleas for help as we navigate through our busy days, but long term are not real solutions to coping with modern life. 
 

What we are trying to do in that moment, as we reach for a calmer train of thought, is to pause the relentless urgency that undermines our thoughtful deliberation, creativity, engagement of those around us and our ability just to get things done.  And whilst possibly effective in that very moment, the ability to balance all that we have going on in our daily lives, requires long term changes in our behaviour.
 

The challenge of changing behaviour
 

Creating new positive habits can make significant differences in your life and give you the skills to turn the impossible into the possible. But how easy is it to change our behaviour? A few statistics from Tony Schwartz of the Energy Project,(3) reveal change, unfortunately, is not that easy…
• 25 per cent of people abandon their New Years’ resolution(s) after just one week
• 95 per cent of people who lose weight on a diet regain it
• Most alarming is that after surviving a heart attack only 1 in 7 people make any enduring life changes around eating or exercise. 
 

We are indeed creatures of habit.  Some behaviors become so ingrained, such as smoking or biting our nails that we can’t stop even if we want to.  In fact, Massachusetts Institute of Technology research has identified two regions in the brain that are responsible for crystallising habits so it’s no wonder we find it so hard to break them.
 

So how then can we break these habits? Researchers are looking at ways to treat and break habits using deep brain electrical stimulation (think of it as a pacemaker for the brain), to suppress our unwanted habits – a little extreme perhaps? Before we line up to get rewired, there are some choices we can make to start our own patterns of change.
 

Making choices to embrace the best within
 

Chris Gardner (the man on whom the film ‘The Pursuit of Happiness’ was based), in his retelling of his battle to come out of poverty and homelessness, offers advice to embrace the best within us(2):
1) Make a choice to let go of judgment and accept who you are at your best
2) Choose to break generational cycles
3) Choose to accept that you are allowed to be happy and have abundance
4) Choose to learn from the past
 

Now, it isn’t easy to act on this advice, apply these choices and make time for what’s important when daily life stresses get in the way. 
 

Take John for example. I’m sure we could all relate to him…
 

John is a small business owner married to Kate a teacher and they have two children 13 and 10.  John is trying to: Run the business; be a good husband; be a good father, keep a handle on the finances, keep fit, maintain his friendships, mentor his staff, fit in a family holiday at some point and maintain the condition of his home…..Something has got to give!!
 

With his energy focused on so many activities, where would John find the time to make better choices and start making changes to his lifestyle?
 

Today we call it outsourcing, the Babylonians(4) called it “…one of the cures for a lean purse”, but the message is clear – outsource the things that you are no good at or not qualified to do so that you can have more time to focus on what’s important to you and what adds value to your life. 
 

So for John it meant joining a small business peer group, hiring a trainer for his staff, seeing a financial adviser and matching exercise with his friendship group. By doing this he freed up time for what was really important to him – being a good husband and father. 
 

Six tips to create new habits
 

John was able to free up his time to focus on making change and you can too. But it’s important to remember that change takes time and there will be some resistance along the way. Try these six tips to help you on your journey:
1) Don’t change everything at once: One or two things at a time
2) It takes about a month to lock in a new behavior
3) Be precise about what you want to change
4) Focus on a positive outcome rather than the negatives
5) Expect resistance (especially from yourself)
6) Enlist the support of others
 

Talk to a professional
 

Whether it’s your finances in 2014 that are a priority, the estate plan, those insurances that you need but don’t like talking about or even if it’s the no sugar diet (and that’s a tough one, I know from personal experience), you need to talk to an expert to understand how they can help. 
 

By enlisting the help of others you can then free up your time to make better choices and to start the journey towards creating new positive habits. 
 

Speak with our award winning planners today to see how you might benefit from the help of a professional.
 

1) “Seinfeld”, NBC, 1989 to 1998.
2) “The Pursuit of Happiness” Chris Gardner 2006
3) “The Energy Project” www.theenergyproject.com
4) “The Richest Man in Babylon” George S. Clason 1926.
 

Source: Zurich, January 2014
 

Disclaimer

The post Creating new habits for 2014: How to have it all appeared first on Newcastle Financial Planners & Financial Advisors.