Heart disease and stroke continue to be the two most common causes of death⁵ in Australia for people over the age of 45 and accounted for over 30,000 Australian fatalities in 2012. Incredibly, thousands of Australians are underinsured or have no insurance in place to cover the expenses should they suffer a debilitating illness.

According to the Cost of Cancer in NSW ⁶report, the total expected lifetime economic cost of cancer – taking into account both the financial cost and the burden of disease (lost productivity, burden on healthcare system) – is almost $1m per person. Certainly for an individual being treated for cancer, out of pocket costs in excess of $100,000 are not uncommon. Many financial planners use a rule of thumb for calculating an appropriate sum insured which at minimum should allow for the removal of debt and the provision of one year’s income, but this is merely a starting point.

These initial figures should be considered along with the financial cost to the individual and family, and importantly the ‘true cost’ of the disease. 

You can rely on trauma insurance

Trauma insurance can cover between 10 to 50 medical events and will pay in the event you suffer a defined health trauma, regardless of your work status. It pays a lump sum to help cope and recover from serious health conditions such as cancer, strokes and heart attacks. Some insurers also offer partial payments for less serious conditions.

Medical advances have meant that our chances of surviving traumatic events are much better than in the past. However, the cost of treatment can sometimes be beyond your normal means. Without trauma cover, you may need to dip into your children’s education fund or your retirement savings; or you might even have to increase your mortgage to pay for expensive treatment.

The difference to income protection

Importantly, a trauma payment is not dependent on you being unfit to work (unlike income protection, where you need a doctor to certify your ongoing health). The diagnosis of a traumatic condition might mean that you physically could go to work, but would prefer to spend time with your family and reduce any work-related stress while you recover and consider how your future will be affected.

To make sure you don’t increase the statistics, check your policy documents to see which level of cover you hold, and speak to your financial planner if you are unsure. They can help you determine what cover you already have, what changes or additions may be appropriate and how to make them.

Speak to your Leenane Templeton Financial Planner to discuss your insurance options. Contact us at 02 4926 2300 or email success@leenanetempleton.com.au.

Source: Zurich

⁵ Leading Causes of Death, Australian Institute of Health and Welfare, www.aihw.gov.au/deaths/leading-causes-of-death.

⁶ Cost of Cancer in NSW, Access Economics Pty Limited for The Cancer Council NSW, 2007.

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Achieving any goal in life usually involves starting with a plan. Investing is no different. One of the most important things to understand before you embark on an investment plan is the relationship between risk and return.

Some investors focus only on maximising returns without considering the risk taken to achieve those returns. Others are so concerned about losing money that they seek to avoid risk altogether. Yet the single, most important lesson investors can learn is that risk and return cannot be separated.

Common risk profiles

There are many investments available with different levels of risk to cater for investors of different risk profiles. As the investment timeframe is naturally linked to life stage, risk profiles can be generalised across age groups (that is, the younger you are, the longer investment timeframe you have and the more aggressive you can be). There is no ‘one size fits all' approach to risk profiling among age groups.

There are a number of risk profiles, but for the sake of this article, we have outlined the three main profiles:

Conservative

Conservative investors are generally prepared to accept lower returns with lower levels of risk in order to preserve capital. Conservative portfolios tend to be allocated predominantly to defensive assets, such as cash and fixed interest, with the remainder in growth assets.

For this reason, people in retirement (in the wealth protection phase of their investment journey) may adopt a more conservative attitude to risk. They have less time to ride out the ups and downs of the share market and tend to have less of their portfolios allocated to shares and other high risk asset classes.

Balanced

Balanced investors generally have more of an equal mix of growth and defensive assets, and are comfortable with taking calculated risks to achieve good returns.

Growth

Growth investors are more comfortable with a higher level of risk in order to achieve potentially higher returns. Their prime objective is to accumulate assets over the medium to long-term and capital security is secondary to potential wealth accumulation.

Investors in this category can therefore expect to have around 85 per cent of their portfolio allocated to growth assets, although still diversified across shares, property and alternative assets.

Whichever risk profile you may fit into, the most important consideration when it comes to investing is that your investment plan needs to be tailored to your individual needs and goals.

Source: Macquarie

To learn more about how your risk profile will impact future savings, talk to your financial planner.
Call (02) 4926 2300 or email us. 

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We will provide you with assistance and guidance on:

• Education – helping you to understand your investments and other key financial matters. This builds your knowledge and confidence.
• Budgeting – reviewing your finances and identifying opportunities to manage debt and save money.
• Estate planning – we work closely with estate planning professionals to show you how best to structure your assets to benefit your estate when you’re no longer here.
• Insurance – guiding you on protecting your family and your assets in the event of illness, injury, disability or death.
• Retirement planning – helping you find answers to the important questions such as “will I be able to retire comfortably now?”; “how much money do I need to retire?” and “what do I need to do before I retire?”
• Government benefits and allowances– determining your eligibility for government assistance for various benefits from pensions to co-contribution allowances and ensuring you receive the correct entitlements.

Quite simply, your qualified financial planner can help alleviate the worry and stress associated with your finances, leaving you with more time to enjoy life.

Disclaimer

To speak with one of our professional advisors about your financial planning needs, please do not hesitate to contact Leenane Templeton.
Call (02) 4926 2300 or email us.

Financial planning advice – Is it the next stepping stone on your path?

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A good financial planner is your best asset and the following information describes why having a good financial planner is important in uncertain economic times – or any time really.

Financial planning is about establishing a long-term strategy to secure your financial future with the lifestyle and living standards you desire. ‘Value’ often goes beyond dollars and cents. It can be the peace of mind and security that comes with being better prepared for the future. Once you've started a relationship with a good financial planner you will quickly see that they add value to your circumstances by helping you in a number of ways.

How can a good financial planner help better?

• Setting goals. This process helps you decide where you want to go in life. A skilled financial planner can assist you to identify your financial goals, prioritise them and understand the steps required to turn your vision into reality.
By knowing your financial goals and time frames, it’s easier to see where to concentrate your efforts. You'll also quickly spot the distractions that would otherwise blow you off course.
• Getting a financial plan started. Developing a written plan with a clear emphasis is critical to achieving your financial objectives. Your financial planner can also provide budgeting and debt management advice to help you start creating wealth without the costly anchor of “bad” debt. Protecting your future dreams with appropriate insurance is another key aspect your planner will manage.
• Maintaining a diversified portfolio. Every financial planner is required by law to take a client’s risk tolerance into account as part of their personalised financial plan. Diversification is another important tool for managing risk.
This means that the advice given and any investments recommended as part of that process are suited to your needs and risk level. And these will change to meet your circumstances as they vary throughout life.
• Being there over the long term. Going your own way is rarely the best option. Most people don’t have the background knowledge to feel confident about making investment decisions that will have a large bearing on their financial future. Keeping up with all of the legislative changes and new investment offers is also an onerous task. Your planner will be there to guide you on your path to financial independence and ensure your financial plan remains relevant and on track.

While investment magazines and subscription services can provide useful information, they are often written by journalists with a general grounding in financial concepts but who are not looking at the fuller picture. A good financial planner is trained to take into account all legislative and strategic implications to ensure you receive the best advice possible… and this training is ongoing.

Your financial plan is not a one-off, set-and-forget arrangement. Just as life has its many twists and turns your financial plan must be flexible and appropriate to your needs at any point in life.

If you would prefer to have a qualified, experienced and licensed financial planner work together with you on achieving your financial goals, give us a call.
Call (02) 49262300 or email us.

Disclaimer

A good financial planner is your best asset and we have our professional and qualified advisors at hand ready to assist you.

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The amateur worrier spends too much time worrying about things that are likely to happen. The true professional worries about the unlikely events that can be really disruptive to our plans. It is the unexpected that can cause the most harm.
 

For instance, your professional worrier is not concerned about the possibility of a rise in interest rates or a share market correction. These issues might slow the economy and may even bring on a mild recession but we have lived through recessions and market crashes before. The portfolios we recommend are built to withstand economic bumps.
 

A professional worrier considers much bigger issues such as a major economic depression. We worry about how globalisation is increasing the correlation between global markets so that the diversification of our portfolios is less effective.
 

The point of worrying is to see where the world is changing. Change means we may need to alter our recommendations or take advantages of new opportunities.
 

A professional worrier has to do just the right amount of worrying. If you spend too much of your time worrying you may never invest at all. The pessimist focuses only on doom and gloom. They worry too much and leave their money in cash where inflation and taxes eat into their returns.
 

At the other extreme, there are the out-and-out optimists who don’t worry enough. They can be unabashed bulls chasing the latest investment fad. History is littered with failed fads.
 

A professional worrier must be a cautious optimist. We believe you must be invested if you are going to achieve above-average returns. We know that creating portfolios based solely on historical data is not enough because history rarely repeats itself. Chasing a few winners is risky because you may get exceptional returns one year followed by big losses in following years. We know the enemy of compounding is losing – better to get consistent returns year after year.
 

Our financial planners are at hand to discuss this article and any financial planning matters you may have.
Call (02) 4926 2300 or email us.
 

Disclaimer.
 

Excuse us – we must get back to worrying for a living now.

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When it comes to investing, many people are their own worst enemy. Fuelled by a desire for short term gains or the fear of losing money, they buy and sell at the wrong time based on emotional responses. These emotions are often triggered by events or noise that can exaggerate or misrepresent the facts, and are already factored into market expectations.

The current market conditions can be described as a “risk on/risk off” environment. This is characterised by the dominance of emotionally-driven factors over the traditional fundamentally driven arguments, and results in extreme short-term volatility and low levels of long-term confidence.

Changing the way we think

We’re in a world of heightened global geopolitical uncertainty thanks to unrest in the Middle East and the lack of political cooperation around resolving the problems facing the US and Europe. This has created strong headwinds that have hindered the outlook for global economic growth and economic prosperity. These elevated levels of uncertainty and confusion, combined with the continued political brinkmanship around the world, have led households and businesses alike to become significantly risk averse.

But it’s important to understand that financial markets aren’t perfectly synchronised to global or domestic economic trends.

Although markets will eventually return to the primary fundamental drivers of long-term performance and we shouldn’t lose sight of these factors, it is important to recognise the current drivers of market behaviour and adapt your investment strategy to take advantage of the opportunities it presents and the potential risks it imposes.

Timing has never been an exact science

If you’re going to try and pick the right time to invest in markets, there’s a lot of information you have to understand and analyse to get it right. In reality, you’ll never successfully pick the top or bottom of the market. So in a world that’s driven by so much sentiment and uncertainty, where assets that carry risk trade up or down irrespective of their fundamental valuation, you become a contrarian investor, i.e. you don’t follow the crowd, because being a consensus investor doesn’t take you anywhere.

To survive the turbulence and turmoil of financial markets today, you need to be nimble. Traditional market timing, in the context of a trading strategy, has more emphasis on the fundamental drivers of markets rather than indiscriminate risk on/risk off trading. Ideally you should take on some risk from time-to-time in a market that can offer you great opportunities. Then at some time in the future when there’s nothing but good news in the market, you offload some of that risk. But you do this in small amounts – the classic dollar cost averaging argument.
 

Maximising your potential success

Successful investing doesn’t come from accumulating cash and waiting for the right time to invest, nor from frantically trying to withdraw your money when times get tough. Dollar cost averaging, or regular investing, essentially averages the price you pay per unit of the investment and mitigates the risk of buying at the top of the market.

What this means for investors

• It is important to recognise that geopolitical uncertainty and social turmoil is now the norm rather than an exception, and it’s important to pay close attention to forces that shape the financial market landscape.

• During periods of high volatility and nervousness, financial markets offer unique opportunities to acquire assets that are cheap, attractive and of great value.

Always speak with your financial planner before making your investment decisions.

Source: Advance Asset Management Limited, December 2011

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When considering shares to purchase, a company that generates below average earnings, has poor cashflow or a weak balance sheet may be one for you to look at especially carefully before purchasing. Whilst there are other characteristics of weakness to look for, these offer clues that unpleasant issues may be about to surface.

Our Newcastle Financial Advisors are located on King Street, Newcastle, NSW 2300, Australia

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With all that is happening in the financial markets around the world at the moment, it is only natural to be wondering where to invest and to recognise that you may need some assistance. And it may not just be for you, it may also be for your family, and your extended family. With spring weather upon the markets and investments can become a popular topic for discussion around the BBQ with friends and relatives.

So instead of taking advice from your friends and relatives who may not be qualified, it makes good sense to seek advice from a financial advisor and financial planning experts. After all it is your savings and your future for you and your family that is in question.

The financial advisors at chartered accounting firm Leenane Templeton in Newcastle are available to offer you assistance. You can have a one hour, no obligation, no charge consultation to discuss your needs with them. OK, but how can they help you?

Our financial advisors can help you assess your present financial position and listen to your personal goals as well as your financial goals and then determine whether you are in good shape to meet them and, if not, what is the best way forward to ensure you do achieve your desires. Knowing what your goals are puts you in a better position to make the right choices, and helps your financial advisor develop an appropriate plan for you and to tailor it to your needs.

The financial advisors at Leenane Templeton are always available to assist you in achieving your goals.

www.financialplanner-newcastle.com.au

www.selfmanagedsuperfundstrategies.com

www.leenanatempleton.com.au

www.newcastle-accountant.com.au

PLEASE READ OUR DISCLAIMER

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Whilst each generation has very different needs and priorities when it comes to managing their money and their finances, an increasing number of cases are arising where the decision of one generation is having a detrimental effect over the financial stability of other generations. Perhaps the most common example of this is adult children seeking large sums of financial assistance from their aging parents. This is due to a range of reasons, most of which could be avoided if they had were more prepared. 

Whilst pre-retirees and retirees are focusing on the growth and longevity of their nest egg, their children are more focused on education, buying their first homes and starting a family. We are often so focused on our own financial goals, that we don’t consider how our family’s decisions and experiences can have an effect on those around us.

If a child finds themselves in financial difficulty due to factors such as redundancy, illness or debt, most parents first instinct will no doubt be to help their children by providing financial support. This, however, can have a significant impact on the parents’ superannuation nest egg, value of their estate and their quality of life during retirement.

Take Sally and Mark, for example.

Sally and Mark had just retired, and were looking forward to their upcoming golden years, spending quality time with their children and grandchildren and travelling around Australia as they had always planned to do.

Unfortunately, only 6 months into their retirement they had a devastating call advising that their son, Michael, had suffered a heart attack and passed away.

Because he was a fit, healthy man in his late thirties, Michael had not seen the need for any life insurance and for this reason his wife, who was a stay at home mum, was now left to manage their two children and mortgage on her own.

As most parents or grandparents would do, Sally and Mark welcomed their daughter in law and grandchildren into their family home.

The financial impact on Sally and Mark’s retirement plans was enormous. In order to support their daughter in law and grandchildren meant that their retirement plans were no longer what they had originally intended, and Sally and Mark would now need to live a very modest lifestyle in order to make ends meet.

*This case study is for illustrative purposes only.  

It is important to encourage discussions with your children from an early age, and ensure they are educated around their finances in order to avoid these situations. Arming your family with as much information as possible will assist you in helping each other for the long term.

By planning together and communicating, all generations can enjoy a better financial future.

Have you considered how the following issues may impact members of your family? What are some of the solutions to consider to address these issues?

For 20 somethings:

29% of Gen Y are “financially unfit” – high debt, no insurance, few savings and expensive accommodation.¹

–          Struggling to manage credit card debt

–          Low income

–          Paying off HECS debt

–          Increasing rental costs

–          Relative lack of awareness regarding finances

–          Living costs (many holding a live now, pay later mentality)

Things to think about:

–          Consider avoiding a credit card

–          Budget wisely

–          Educate yourself about your finances

–          Start planning for your future now – start a savings plan now- linked high interest account “pay yourself”

–          Live according to your income

For 30 somethings:

Only 53% of 30year olds believe they could survive longer than a month if they were unable to work.

–          Job stability and salary packages hit by financial crisis

–          Increasing property costs

–          Mortgage stress

–          Young families to support

Things to think about:

–          Speak with your Financial Planner about Risk Cover

–          Consider debt consolidation

–          Ensure you don’t overextend yourself when purchasing a property

–          Budget wisely

–          Don’t forget to think about your super

–     Consider some salary protection, life trauma insurance

For Pre-Retirees & Retirees:

It costs around $350 per week to support an adult child. That’s money many pre-retirees and retirees desperately need to build – or rebuild – into their retirement next egg.²

Around 22,500 Australian grandparents are looking after their grandchildren.³

–          young adult children living at home

–          lending money to children for major life expenses – i.e.: first home.

–          supporting children who are not coping with financial debt

–          instability of markets and the GFC shrinking super accounts

Its not too late to discuss these issues with your financial planner to learn about how they can help your family better plan for its collective future.

Visit:

www.financialplanner-newcastle.com.au

www.selfmanagedsuperfundstrategies.com

www.leenanetempleton.com.au

www.newcastle-accountant.com.au

Source: Lonsdale Financial Group

¹  Bankwest, Social Indicator Series, as sourced by BT Financial Group

²  What price the clever country? The costs of tertiary education in Australia, AMP. NATESM income and Wealth Report, 21 November 2008 and Honey, I calculated the kids… it’s $537,000, AMP. NATSEM Income and Wealth Report Issue 18 December 2007 as sourced by BT Financial Group Limited.

³  ABS: Family Characteristics, Australia, 2003 as sourced by MLC Insurance

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We have a professional team of Chartered Accountants, CPA qualified staff, taxation specialists, wealth management experts, financial planners, business accountants, business advisors and marketing expert in order to help you in all areas of your life whether you are just starting out or in retirement.

Our firm has regularly financial events including SMSF Trustee Seminars, Financial planning seminars and even Business bites a seminar designed for business owners to maximise chunks of information from guest speakers over a lunchtime.   Please feel free to call our team or subscribe to our Newcastle office financial updates through email.  We look forward to working with you 

For more details about our firm you can visit 

Business Accountants in Newcastle

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We look forward to working with you over many generations. 

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