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Why you’re not too young to see a financial adviser

Financial planners are for old people, right? Well, not really.

The idea of seeing a financial planner, at any age, can be daunting. In fact, just about anything relating to finance is often placed in the “too hard” basket; something to be looked at another day.

It may seem that seeking financial advice is something you only do when you’re older and actually have money but maybe the best time to start is actually now! According to a 2016 study by the Financial Planning Association of Australia, 67% of Gen Y respondents “dream about the future at least a few times a week”. But what are we doing to make our dreams a reality? Are we putting up too many roadblocks by thinking financial planning is not for us?

I sat down with one of our financial advisers here at The Hopkins Group, to see what he had to say about some of the reasons why Gen Y aren’t seeking financial advice and getting a head start on planning their financial futures. As a member of this generation myself, these are some of the common objections I hear my friends make (and some I’ve even been guilty of thinking myself), so I was interested to hear how an expert could counter these arguments.

I don’t have enough money to invest

Well, one of the most crucial parts of being a financial adviser is to work with clients in terms of their budget and their spending; to make sure you are maximizing what you currently have to work with, helping you develop and cultivate more ways to be able to grow that wealth. This can be the money that’s currently in your super or in your personal account.

The earlier you start, the greater compounding effect you will have with your income. So I certainly think it’s important for young people to seek financial advice even though they may feel like they don’t have that much money.

I don’t know anything about finance

That’s one of the reasons why you see a financial adviser – we’re the specialists in that space! It’s our job to be across all of those things for you and help educate you along the way. That way, you’re also getting an understanding of what it takes to grow your wealth.

I’m too young to be thinking about insurance

I think that’s a thought a lot of young people have – that they’re bullet proof. The reality is that bad things happen, even to young people. I have a friend who died on the basketball court from a heart attack at 37 – he suddenly collapsed and couldn’t be revived. So I certainly think if you have a family and loved ones that it’s something worth considering, because if something happened to you then you’d want your family to be looked after.

I’m just going to leave my super with AusSuper/Hostplus etc…

It pays to be informed about what choices you have available. Industry funds are certainly  a huge proportion of Australian’s use but some of the disadvantages of that are the control you have and knowing where your funds are invested.

If you were to see a financial adviser to have them actively manage your super portfolio, then you’re looking at a bit more return, control and knowledge about what’s happening with your super contributions. It is important to make sure you’re selecting appropriate investments so that you are able to outperform those superfunds from an active management point of view.

It’s too expensive to see a financial adviser

The cost for seeking financial advice varies – it is related to the level of advice you’re after and the time spent providing advice. I normally break up my costing into three separate areas. The first would be a statement of advice fee, which involves the cost of preparing the advice document. The second fee is the implementation fee; when you receive the advice and you’re happy to go ahead for us to implement it on your behalf then there is sometimes a small fee to implement that strategy. The third fee is the ongoing advice fee, which you pay us for managing your portfolio and attending to any changes in your circumstances or in the marketplace and just being available to address any queries or concerns you may have.

Final points

If there is one message I think we can all take away from my chat, it’s that it is never too early to seek financial advice. Think of financial advisers as your personal trainers – except instead of working on your physical health, they’re working to make sure you’re in great financial shape.

Financial advisers like the team at The Hopkins Group are there to help you learn more about your own situation and how you can put strategies in place to achieve your goals and make sure you’re prepared if life throws you curve balls. And the best thing is, the earlier you start, the longer you have to work on your results – hopefully placing you ahead of those who put things off by putting up the objections like those discussed in this blog.

So what are you waiting for? Get started today.

General Advice Warning: This blog may not be suitable to you because it contains general advice that has not been tailored to your personal circumstances. It is important that you consider your own situation before acting on any information contained in this blog.  Please seek personal financial advice prior to acting on this information.

Disclaimer: Shane Light is an Authorised Representative and 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.

Travelling to Inspect Your Rental Property? Pause before you go

Did you know that for the financial year ending 30 June 2015, rental property travel expenses claimed by individual taxpayers amounted to approximately $450 million? So it’s not surprising to see some reform with respect to these claims!

As of 1 July 2017 landlords are no longer able to claim a tax deduction for travel costs associated with residential rental properties. Nor will travel costs be allowed or recognised in the cost base of the property for Capital Gains Tax purposes on sale.

This exclusion applies to the costs of attending inspections, maintaining the property and attending a strata meeting whether you travel by your own car, taxi, public transport, or even an airplane. You also cannot claim the lunch you had when you attending the meeting with your property manager or the money you spent in a motel for your trip to repair the property.

Not all taxpayers are impacted

While this change does impact the typical “mum and dad” investor, it will not apply to entities that are carrying on a business of “letting rental properties”. This includes providing retirement living, aged care, student accommodation or property management services.

Institutional investors are also excluded from this change, and will continue to be allowed a travel deduction. Examples of these types of investors include corporate tax entities, superannuation plans that are not SMSFs, public unit trusts, managed investment trusts, or partnership or unit trusts if all members of the partnership or trust are entities included on this list.

Moreover, the change in legislation will not prevent an investor from claiming a deduction where a property has a dual purpose. Examples of a dual purpose include where the property is both a commercial and a residential premises. In this instance, travel costs will need to be apportioned between deductible expenditure and non-deductible expenditure.

Not all is lost – other rental property expenses still remain deductible

While many investors have lost a deduction with this change, fortunately there are still a number of expenses for your rental property you may be able to claim! Some examples include:

  • Advertising for tenants
  • Body corporate fees and charges
  • Council rates
  • Water charges
  • Land tax
  • Interest on loans
  • Cleaning
  • Gardening and lawn mowing
  • Pest control
  • Insurance (building, contents, public liability)
  • Agent fees and commissions

Knowing which deductions you can and can’t claim can be a minefield if you’re not in the know. Thankfully experts like the accounting team at The Hopkins Group are on your side, to help you make the most out of your tax return. To get up to date advice on what deductions may be available to you, contact an accountant today.

Disclaimer: The information contained herein is of a general nature only and does not constitute personal advice. You should not act on any recommendation without considering your personal needs, circumstances and objectives. We recommend you obtain professional financial advice specific to your circumstances.

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