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Q&A | Keys to Success Webinar

On 1 March 2017, The Hopkins Group hosted John’s Keys to Success webinar. We received a couple of interesting questions during the webinar that we felt required a more in depth answer than what was possible in the live chat facility. John has taken the time to answer these questions personally, following the presentation, and we are pleased to share these questions and answers to you here. 

If you would like to watch a replay of this webinar, please contact us and we will email you a link to view this in your own time.

Question: How do you respond to the belief that land appreciates and buildings depreciate?


There are three important points to make regarding this question, the first is the use to which you could put to that particular piece of land. The second is the demand for that use in that position and the third is to say that it is not correct that buildings always depreciate in value.

Would you prefer to own half an acre on the shores of Cremorne or in Collins Street Melbourne, or would you prefer to own 400 acres 400 km west of Alice Springs? Of course, the point is the size of land must ALWAYS be related to its ability to be used (town planning) and the demand for that use. Given that land in central Australia an office building that would be an excellent investment in Collins Street or apartments and town houses on land in Cremorne would be your preferred investment every day. But the size of the land is so much smaller. Land, or the size of it, on its own is not the whole story.

You might think that the analogy is not relevant due to the extreme differences and distances but it is the same factors that would apply to land in outer urban areas of Australia’s metropolises (Brisbane, Sydney, Melbourne) and those quality inner urban suburbs that have underlying demand of occupation because of the general amenity provided by being inner urban. What gets sacrificed is the size of land and or the type of property.

Better off a terrace in Paddington or South Yarra than a house and land in Packenham or outer urban Sydney.
If multiple dwelling developments (townhouses and apartments) are in appropriate locations for the type of property and the title to those properties are modern, that is, up to date with today’s laws of title and are therefore easily saleable, transferable and financed, those properties may not be sitting on land but they have rights and title to land for the use that they have been created.

Tell me an apartment overlooking Central Park or Manhattan Island, in Elizabeth Bay overlooking the harbour or South Yarra looking north to the river and west of the Dandenong’s doesn’t have value. They don’t have quarter of an acre land that they are built on but growth in capital and income over decades and decades is beyond question.

In regard to buildings depreciating in value, if I built an office building, a house, a townhouse development, an apartment building, ten years ago, to build exactly the same buildings today, will cost a lot more. That is a combination of inflation, development costs, government charges, building costs and so on.

Depreciation in buildings occurs in those buildings that are not quality, not in well designed, well-constructed buildings.

All the above doesn’t mean the right house and land properties may not be good investments, it just means in the alternative, to suggest you need buildings on land is the answer and townhouse or apartments aren’t good investments is ridiculous and not borne out in fact.

Question: What’s your take on the recent media reports that banks are blacklisting certain Melbourne suburbs for funding?

“Media reports: The banks are listing certain Melbourne suburbs for funding”

Firstly, if you were in control and responsible for the mortgage assets of one of Australia’s licensed banks, you have prudential obligation and legal requirements to ensure that book is not overly exposed to any one particular category of asset, in this instance, property, in relation to other assets within that book.

Therefore if there is a particular suburb in a metropolis like Sydney, Brisbane or Melbourne, that enables the creation of a high number of a particular type of property, in this instance, let’s say Abbotsford, Melbourne with medium – high density apartments, whether or not that market is deemed a risk at one level or another that bank must curtail its lending.

Secondly and obviously if a particular asset or group of assets is considered high risk in terms of security, the bank would obviously not lend. Using Abbotsford as an example, where certain banks have limited their lending, the issue is very much to do with the numbers that have been developed there and the weighting in their mortgage books.

For reasonable quality developments, all through Abbotsford, there is ample proof of demand of occupation from both owner occupiers and tenants. We have firsthand experience of high demand in recent months for people to occupy many medium-high density categories of property in Abbotsford.

In regard to demand of ownership, there have been many sales in the secondary market, that is sales of individual properties in the open market after a development has been constructed and settled.Compared to say Docklands, and possibly the CBD of Melbourne, where the markets have been driven by off the plan sales mainly to overseas investors. And the local market for both owner occupation and ownership is weak. This therefore would suggest Docklands and the CBD are high risk in comparison to Abbotsford.

The issue is carefully investigating the circumstances around particular markets.


How to keep financially healthy with a baby on the way

What does growing your family mean for you? For me, it’s a wonderful time that brings to mind thoughts of those tiny, glorious, bundles of joy that are babies.

But then, what about the financial costs?

Scans, tests, a cot, pram, nappies, monitor, car seat and more; these all cost money and often lots of it. It can be stressful to think about, but if you get your family budget in order early on, your impending costs of parenthood can be less stressful and more fulfilling over time.

With baby number two on the way in my household, this topic is front of mind so I want to share with you my top tips to staying financially fit while your family grows.

1. Consider your hospital expenses

One big thing you need to consider before you give birth is how and where you want your baby to be born. Ask yourself; who would you like to care for you? Can you afford private care? Which is better for you and the baby?

Going Public

Choosing to have your baby in the public health system is the most budget friendly option; there is no charge for labour or birth care in public hospitals. Your birth will be attended by a midwife or the obstetrician on duty, and all costs are covered by Medicare.

With this option, the costs to watch out for are potential out-of-pocket expenses during your post-birth hospital stay, such as use of the hospital’s disposable nappies, or costs for pregnancy care provided by your local GP who doesn’t bulk bill.

Going Private

If you choose a private obstetrician in a private or public hospital, private health cover is strongly recommended.

The costs of your care under the private system will vary greatly depending on a number of different factors, so it’s best to do your research into what these may be based on your ideal birth plan.

It’s worth double checking with your health fund before you get pregnant to see what exactly your policy covers. Remember that most policies have a qualifying waiting period of 12 months, so it’s best to plan ahead and make sure these options are added at least one full year before you conceive.  And watch out for “gap” costs (the shortfall between your policy coverage and the charged cost of a service) that you may have to pay for things like obstetrician appointments.

2. Are you ready for two to become one? Managing your income during maternity leave

Mothers-to-be, who are often in the peak of their earning career, have to stop work to look after their tiny human.

Will your family be able to adjust to dropping to a single income stream?

It can be a big adjustment, so here a few things you can do to make the adjustment as painless as possible.

Prepare a plan
Crunching the numbers to determine how much it costs to live safely in the suburbs, turn the lights on and keep the cat warm can be scary, but it will ensure your money stretches further.

Work out your household expenses and how much you need to sock away for food, mortgage or rental payments, car and bills. A detailed budget can really benefit your bottom line.

Start saving

Allocate some of your hard-earned money to savings. And by savings, I mean money that you can’t touch until baby is born. This is your buffer behind you for emergencies.

You have about nine months from the time that you find out you’re pregnant until the time you welcome your new arrival, so start putting money aside while you have two income streams coming in. Set up a high interest savings account and be disciplined with how much you regularly contribute.

Learn to spend less

Scaling from two incomes to one could be dangerous if your spending habits remain the same despite your reduced income.

Get on board with finding new ways to save money.

Use websites to track when fuel is cheapest and only fill up on those days. Sign up for direct debit on your bills to get discounted rates. Look closely at your home loan and negotiate with the bank for a lower interest rate. Move to a cheaper suburb further from the city to save rent.

While you’re at it – get rid of your credit cards. It’s easy to fall into the trap of spending more than you earn if you pay with credit cards; you’re less likely to keep track of your spending and before you know it you’ve spent away your rent without even noticing. Cold, hard cash is a lot harder to spend. Paying in cash will reduce temptation and ensure you avoid making extra monthly credit card repayments to the bank.

Know your entitlements: Government help and employer subsidised Paid Parental Leave (PPL)

You could be eligible for government benefits such as Parental Leave Pay, a scheme in which you will be provided with minimum weekly wages up to 18 weeks if your income is less than $150,000 per annum.

Depending on your income and assets, you may also be entitled to other benefits such as the Child Care Benefit, Family Tax Benefit, Parenting Payment or a Health Care Card.

You might also be able to access to employer-paid PPL through industrial awards, or individual employment contracts. It’s well worth checking what you’re entitled to and incorporating these benefits into your budgeting.

3. Thinking ahead – child care and school fees

Now that you’ve started thinking about the initial costs of having children, it’s worth looking ahead.

If you intend to return to work and reinstate your dual income lifestyle, childcare is a hot topic –especially considering how important quality care is for the development of a child. Not only will you need to consider how difficult it is to find a placement in your preferred location, you’ll need to work out how much will it cost.

From nannies to day care facilities, childcare costs vary depending on where you live, what type of childcare you choose and how many hours a week your child will spend in childcare.

When it comes time to go back to work, you’ll need to revisit your budget and factor changes to your income along with the added expense of professional child care services. This will help you decide whether or not returning to work will financially benefit you.

And then comes school.

The reality is children only get more expensive the older they get, when education, transport, school excursions and sporting costs really start to take centre stage in a big way.

In fact, John Velegrinis, chief executive of the Australian Scholarships Group, says parents need to start planning school related finances from the day a baby is born.

If you opt to put your children in private school, school fees could take a large slice of your total income pie each year. That’s even before you consider the costs of soccer/ballet/chess classes, pens and paper, school shoes and backpacks.

The good news is that you’ve got a bit of time to plan for these larger ongoing expenses, so there is no need to fear! The earlier you get on board with applying a strategy to your financial future, the better off you’ll be in the long run.

Remember – while it can be scary to think about all these expenses, growing your family should be a time of joy and excitement. You also don’t have to look at the bigger picture alone. Talk with your family about their experiences and don’t be afraid to ask for help when you need it.

And if you would like professional advice, why not consider speaking to The Hopkins Group? Family is really important to us, and our team is experienced in providing advice in a number of areas including budgeting, financial planning, personal insurances such as life insurance and income protection, and estate planning. We can even help you get a loan for the big car you’ll need to fit all those kids you’re planning on having! Contact our team today.

General Advice Warning: This advice may not be suitable to you because it contains general advice that has not been tailored to your personal circumstances. Please seek personal financial advice prior to acting on this information.

Trumped by the truth


Does Trump tell lies?

We all know the answer to that.

And if he doesn’t believe that they’re lies that he tells, he must believe they’re just ‘sales puffery’, ‘white lies’ or even more laughably, ‘alternative facts’.

Even my young children know the difference between ‘white lies’ and ‘lies’; there is NO difference. And as for ‘alternative facts’ – I mean come on! Lies are lies are lies.

Now it seems we live in a world where telling lies and committing to actions that you either can’t do, won’t do, or don’t know if you can do, is just the ‘normal’ state of modern U.S. politics.

Thank goodness we are not quite at that point here in Australia – but if our leaders Shorten, Turnbull, and others don’t take a hard stance, it won’t be long before we’re the same.

How terrifying to think that the leader of the free world could have been elected on lies and or sales puffery.

To think that lack of and complete disrespect of issues of equality – whether relating to gender, race or religion – could also be at the core of winning an election in such an important western democracy, is absurd and worrying.

However, we are where we are.

Trump is President.

So with this absurd reality set, we turn to asking ourselves what this means for your future financial wellbeing and what should you be wary of in this modern world where lies flow like currency.

Well, in regard to the first matter, Trump’s presidency should see you approaching your future financial wellbeing the same as you always would.

That long term plan should not be changed.

In other words, taking all into account to this point, there is nothing Trump has said or done which has had consequences that can be seen today or into the foreseeable future, that would have us recommend changes for our clients.

If anything, his commitment to ‘make America great again’ (how egotistical can you get? I think it’s pretty great as it is), associated with some of the planned actions to initiate his contentions could, and in fact have to a recognisable degree, lifted the U.S. economy and positively influenced the general world economy since the election. This view seems to be supported by a number of pundits and may continue in the short term, and possibly out to about five years into the future.

Of course as we go forward this will need to be considered, on balance, with possible negative impacts on world trade, foreign affairs generally and specific impacts for Australia.

But no doubt if the U.S. economy is firing, the positive ripple effects of this will be felt across the world – in more ways than just economically.

As for the second point, we need to take a lesson from Trump.

He may have become President on lies, sales puffery and promises that will not be kept – and maybe that’s worked for him.

However unlike nearly everyone else on the planet, he really didn’t have anything to lose.

His father left him the equivalent of billions of dollars, which he has nurtured and sat on through to today. He obviously doesn’t mind who he insults, hurts or annoys, and his narcissistic personality seemingly knows no bounds and could not be penetrated even by a ballistic missile.

But that is nearly certainly not your situation.

Often we, The Hopkins Group that is, are told we are conservative in our advice and our rhetoric.

I don’t believe we are conservative; I hope and believe that we are caring, accurate and real.

Lies, exaggeration, false promises, and unrealistic views of the future are not what you should build your future on.

Whether it’s in politics, religion, industry and financial services generally, or more specifically with regard to what you personally should or could do with your financial situation, the truth and reality should reign supreme.

Build on real and correct strategies; be conservative but not so conservative that you never take the correct action.

Just remember; if it sounds too good to be true, it probably is.

Lies and unrealistic promises may have worked for Trump, but they will not work for us mere mortals.

How to be Uber smart with your tax responsibilities

Australia may have been slow to take up Uber originally, but these days, it’s full steam ahead for the thousands of drivers who have signed up with the global ride provider.

The extra income is no doubt a drawcard, but if you’ve been quick to get behind the wheel, have you thought about what impact this bonus salary will have on your tax return?

We’ve looked at some common questions below and provided some helpful answers so that you don’t have to take the foot off the pedal when tax time approaches.

Do I need to declare my Income to the Australian Taxation Office (ATO)?

Yes. Any income you earn is required to be declared to the ATO.

Money made as an Uber driver is still ‘income’ – it should not just be considered ‘cash in hand’ or pocket money that can quietly be slipped under the mattress.

Declaring your income is important – now more than ever – as the ATO is receiving large amounts of soft data from sources such as Uber. If you fail to declare your income, you will not only be required to pay tax, you will also be charged penalties and interest.

What deductions am I able to claim?

You can claim the business use portion of the following:

  • Tolls
  • Parking
  • Passenger costs, i.e water, mints, etc
  • Licensing or service fees paid to Uber
  • Mobile phone bills
  • Some costs associated with becoming an Uber driver

There may be other deductions available on a case by case basis, so it is important to keep all your receipts to discuss with your accountant at tax time.

It should be mentioned that you are not able to claim the following:

  • Costs for your driver’s license
  • Fines – parking, speeding, red light, etc
  • Clothing or meals

What’s the difference between claiming cents per kilometre and logbook?

Cents per kilometre

  • Can only claim up to 5,000 kilometres
  • From 1 July 2016 the rate is 66 cents per kilometre
  • Using cents per kilometre includes general car expenses such as, servicing, petrol, depreciation etc, therefore not able to claim any additional expenses for your car.


  • Must keep a logbook over 12 consecutive weeks, which is required to be updated every five years.
  • Your logbook must include the following:
    • Date of travel
    • Odometer reading at the start and end of the drive
    • Number of kilometres travelled
    • The reason for the travel
  • You may be able to claim the following:
    • Car insurance
    • Services
    • Repairs
    • Petrol
    • Depreciation
    • Car registration
    • Loan interest

To find out more about the kilometre vs log book reporting options, read our blog post ‘Get your motor running‘.

Click here to download a log book template

Do I need to register for GST?

The short answer is yes. But it’s complicated.

The general rule is that a small business must be registered for GST, if it has a turnover of more than $75,000. Most drivers wouldn’t meet this threshold if they’re just working part time out of hours to supplement their main income. So you’d think they’d be exempt from GST rules? Incorrect.

In August 2015, the ATO announced that all Uber drivers will be required to register for GST – regardless of turnover. Uber recently challenged this in the Federal Court but lost with Justice John Griffiths maintaining that Uber is a taxi service under the law, and should be treated accordingly. So what does this mean? If you’re a driver who hasn’t been paying attention to your GST responsibilities, you could find yourself in a spot of trouble. Speak to an accountant who can help with your registration and make sure you do the right thing.

What do I need to consider in terms of tax when it comes to setting up my new Uber business?

  • Open a new bank account that is purely for your Uber income and expenses; this will make it easier to determine what are personal and business related expenses.
  • Make sure you keep aside between 30 to 40% of your business income to cover tax payable.
  • Engage a Tax Agent such as The Hopkins Group; they will be able to provide advice and assist with completing your quarterly BAS and your Annual Income Tax Return.
  • Look into using a software program such as Xero. It gives you the ability to allocate your income and expenses, you can save all your receipts, pull out reports, etc. An accountant at The Hopkins Group can provide you with a demonstration of this handy tool.

Life as an Uber driver does have its benefits, but you need to make sure you play by the rules so the extra work and earnings aren’t in vain. You need to treat your ‘side job’ as a driver the same way you would your ‘day job’ and be responsible with your record keeping and filing.

To discuss your tax responsibilities and make sure you stay on the straight and narrow with the ATO, speak to an accountant at The Hopkins Group on 1300 726 082 or send us an online enquiry.



General Advice Warning: This advice may not be suitable to you because it contains general advice that has not been tailored to your personal circumstances. Please seek personal financial advice prior to acting on this information.


When sacrifice can be a good thing

Sometimes it pays to work smarter, not harder, and find opportunities to save money in a proactive – yet subtle – manner. 

Salary sacrificing is one strategy that can be adopted to help in your long term savings plan. It might seem like a small and insignificant change, but in the grand scheme of things, it can really pack some punch.

In this blog post, we break down the dos and don’ts of salary sacrificing to help broaden your understanding of one more tool you can add to your financial wellbeing toolkit.

For the purposes of this blog post and planning for your long term financial security, we’re going to focus on salary packaging for super.

What is salary sacrifice?

Salary sacrifice (also known as salary packaging) is a government initiative that allows you to pay for some items or services straight from your pre-tax salary – therefore reducing your taxable income and putting more money in your pocket.

It is an Australian Taxation Office approved scheme, but you do need agreement from your employer to be able to take part as they have to pay fringe benefits tax on the benefits provided to you. That is, all benefits except for superannuation.

Who should salary sacrifice?

Everyone’s situation is different but typically, salary sacrifice is particularly advantageous to middle and high income earners.

Not-for-profit organisations have special exemptions and their employees are eligible for attractive benefits that make salary packaging a rewarding option. People working for not-for-profits can receive cash benefits such as entertainment and loan repayments from pre-tax income.

A salary packaging arrangement must be agreed to at the start of employment and should be discussed when finalising contract negotiations. It cannot be retrospective so needs to be in place before you earn the income.

What can you salary sacrifice?

It all depends on who you work for – the benefits available to you are determined by your employer, but most will at least offer salary packaging for super.

Some of the other common benefits include:

  • Cars
  • Computers
  • Childcare
  • Meals and entertainment
  • Holidays

Why salary sacrifice into super?

Giving up some of your pay and redirecting it into your superannuation can be a good way to save tax in the short term, and grow your retirement savings in the long term.

Any pre-tax funds that are contributed to super receive a special 15% tax rate as opposed to that portion of your salary being taxed at your marginal tax rate, which is typically much higher.

What this means, is that the higher the marginal tax rate, the higher the savings.

Having said all that, the super contribution limits are changing and after 1 July 2017, if you have an adjusted taxable income of more than $250,000, you will need to pay 30% tax on super contributions.

Case study

Zach earns $80,000 before tax, excluding his employer’s super contribution.

If Zach decides to redirect $10,000 of his pay into salary sacrifice super contributions, he will save $1,950 in tax, with the extra money going into his super fund.


Zach’s boost Does nothing Salary sacrifices $10,000
Take-home pay $60,853 $54,303
Tax $19,147 $15,697
Extra money into super $0 $8,500
Net benefit $60,853 $62,803 ($1,950 better off)


Assumptions: The figures used in this table are estimates only and are based on 2016/2017 income tax rates and a Medicare Levy of 2%.


  • Make sure you can afford to do without the salary sacrificed amount as funds cannot be accessed for the period of the arrangement.
  • When speaking to your employer about salary sacrifice, understand that your employer does not have to agree to salary sacrifice, however they still do need to pay the 9.5% Super Guarantee (SG).
  • Request that your salary sacrifice agreement be in writing and be signed by your employer for your own protection.
  • Seek professional advice to maximise your savings.


  • Don’t forget that you are actually giving up part of your salary to redirect it into super, so your take home pay will be lower.
  • If you have a current arrangement, don’t forget to adjust your salary sacrifice contributions to avoid going over the concessional cap that is coming into play from 1 July 2017.
  • Don’t forget that employer paid super (currently guaranteed at 9.5%) counts toward your concessional cap.
  • Don’t lose any of your employer paid super entitlements as a result of salary sacrificing. There is a loophole in the super guarantee rules enabling an employer to cut an individual’s super entitlements when the employee reduces their taxable salary.
  • Don’t jeopardise your savings potential by going it alone. You can get help from the professionals and make your money work harder for you.

Where do you start?

The most important do before requesting your employer to start salary sacrificing is to speak to a financial planner who can look at the big picture and see how this piece of the puzzle fits in.

A financial planner can assist in creating an appropriate overall financial strategy and consider salary sacrifice in the context of your long term plan.

Call The Hopkins Group on 1800 726 082 and ask to speak to a financial planner who can help assess if salary packaging is a good option for you. You can also fill out an online enquiry to get in touch with our team.




Disclaimer: John Hopkins Financial Services Pty Ltd is a Corporate Representative of WealthSure Financial Services Pty Ltd Level 1 190 Stirling Street PERTH WA 6000 ACN:130 288 578 AFSL: 326450.

General Advice Warning: This advice may not be suitable to you because it contains general advice that has not been tailored to your personal circumstances. Please seek personal financial advice prior to acting on this information.

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