Financial Planning

What is Tax Indexation and What Does It Mean to Me?

A change in income indexation has affected Centrelink payments and entitlement thresholds. The new indexation means you can earn more without impacting your pension amount: 

• Annual maximum work bonus changed from $7,800 to $11,800 
• New pensioner now has an upfront credit of $4,000 

This is fantastic news, as it can open doors to additional opportunities and benefits for Australians of all ages. 

For example, with the increased income threshold, you might now qualify for a Healthcare Card (previously unavailable due to mean test), gaining access to concession entitlements such as discounted medical care and prescription and discounts on various services, including public transport, registrations and other utilities such as electric and gas. 

However, knowing that these changes might also affect your tax obligations depends on your individual and household circumstances. Furthermore, the changes could introduce added complexity to your tax and reporting obligations if you have a more complex and sophisticated wealth-building strategy. 

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What To Do Next?

These changes are complex, and can be overwhelming, and that’s where a financial advisor can help. We can help you understand the full impact of the new indexation on your specific situation, clarify any potential tax implications, and devise a strategy to maximise the benefits while minimising any drawbacks.

To book a 30-minute, no-obligation consultation with one of our financial advisors and see how we can help you take advantage of the new indexation changes, please click the link below:

https://outlook.office365.com/owa/calendar/TheHopkinsGroup@thehopkinsgroup.com.au/bookings/s/OdPFzcue_0SMyGuMNQXvSg2

Alternatively, you can request a callback by emailing us on  info@thehopkinsgroup.com.au or call our reception on 1300 726 082 to secure an appointment via our reception staff. 

5 Ways to up your financial literacy and improve your financial wellbeing

Despite recognising the value of financial advice, many Australians need more knowledge to harness its potential for a brighter future fully. 

A recent Colonial First State (CFS) report reveals a hidden potential within the Australian population: a desire for financial empowerment. 

This article explores the positive impact financial awareness can have on your financial health and future, highlighting the key takeaways from the CFS report and advocating for a collaborative approach to financial literacy.

1. Ignorance is Not Bliss: Knowledge Breeds Opportunity

The report unveils a crucial insight: over a third of Australians unfamiliar with financial advice cannot articulate its advantages. This lack of knowledge hinders their ability to harness the power of professional guidance. By becoming aware of the benefits, individuals can unlock untapped opportunities to achieve their financial goals.

2. Financial Advice: Your Roadmap to a Secure Future

Imagine a clear path towards your dream home, a comfortable retirement, or a secure education for your children. Financial advice is your personalised roadmap, guiding you through complex decisions and potential pitfalls. It provides:

• Tailored Strategies:  An advisor understands your unique circumstances and goals, crafting a plan tailored to your needs.
• Investment Expertise: Navigating the investment landscape can be daunting. Financial advisors have the knowledge and experience to make informed decisions.
• Risk Management:  Unforeseen events can derail your financial journey. Advisors help you identify and mitigate potential risks, ensuring long-term stability.
• Peace of Mind: Knowing your finances are in capable hands allows you to focus on other aspects of your life confidently.

3. Beyond Terminology: Simplifying the Path to Financial Wellbeing

The report rightly identifies the potential confusion surrounding “financial advice.” By simplifying the language and emphasising the practical benefits, we can empower individuals to take charge of their financial future. Imagine:

Clear Communication: Advisors explain complex concepts instead of jargon, ensuring you understand every step.

Focus on Outcomes: The conversation revolves around your goals, not financial products, ensuring your advisor prioritises what matters most to you.

Accessible Options: The government’s reforms allowing superannuation to fund financial advice are a positive step towards making professional guidance more affordable and accessible.

4. Empowerment Through Collaboration:

The report calls for a collaborative effort between the industry and government to bridge the knowledge gap. By working together, we can create a society where financial awareness is commonplace, and individuals feel empowered to make informed decisions about their financial future.

5. Embrace the Journey: Unlock the Potential of Financial Awareness

Becoming more aware of financial advice is not about burdening yourself with complex information. It’s about taking control of your financial destiny and unlocking a world of possibilities. By seeking professional guidance, you invest in your future and pave the way for a brighter tomorrow.

Your Next Step 

Speaking to an actual financial advisor is the best way to know if engaging one is the right call for you. 

To secure a 30min, no-obligation exploration session for you, your family or your friends, please click the link below: https://outlook.office365.com/owa/calendar/TheHopkinsGroup@thehopkinsgroup.com.au/bookings/s/OdPFzcue_0SMyGuMNQXvSg2

Alternatively, you can request a callback by emailing us on  info@thehopkinsgroup.com.au or call our reception on 1300 726 082 to secure an appointment via our reception staff. 

The ESG Investing Landscape in 2022: A Year of Two Halves

The year 2022 was a year of two halves for ESG investing. The first half was challenging, as the energy market disruption in early 2022, coupled with surging inflation and interest rate expectations, placed small and micro-cap stock valuations under pressure. Resources and energy stocks (underweight sectors in ethically screened funds) performed strongly, while ESG-focused funds lagged behind the broader market.

However, the second half of the year saw a more optimistic outlook for inflation and interest rates. Earnings-focused companies experienced a well-deserved upswing, and the impact on resource prices from the Ukraine war subsided. ESG fundamentals also came into focus, with investors increasingly looking for specialist knowledge in areas such as healthcare, IT, and utilities and renewables.

In addition, market inefficiencies in the ESG space began to attract attention. As ESG-focused funds are often benchmark unaware, markets weren’t pricing in the true value of these ESG-aligned companies, leading to opportunities for patient capital investors who were willing to take a long-term view.

Finally, the sustainable universe began to show its potential. Favourable structural trends, such as the transition to a low-carbon economy, are creating new investment opportunities in areas such as renewable energy and sustainable infrastructure. These trends are likely to continue to drive growth in the ESG space in the years to come.

Our financial planning specialists offer a no-obligation, free consultation to assess your situation and guide you through what type of loan you need.

To schedule a quick 15-minute phone call with our Financial Planners, please click here. Alternatively, you can also contact us on 1300 726 082 or visit https://thehopkinsgroup.com.au/contact/

Wealth Adviser Debt vs Equity Summit

The Wealth Adviser Debt Versus Equity Summit 2023 held last 18 July 2023 brought together a panel of experts from the financial advisory and financial planning industry markets to discuss the latest trends and opportunities.

The Summit was hosted by Keith Cullen, Managing Director of WT Financial Group Limited, and our Group’s Managing Director, Michael Williams, was invited as part of the expert panel to explain The Hopkins Group’s successful growth model through strategic equity swap and merger.

Michael explained that equity, unless debt, foster a relationship that is deeply invested by both parties, and thus creating a context where all parties involved has the interest of the Group at the forefront, and not just personal gain.

To watch the full Summit online:

If you are a financial advisor looking to expand or grow, our THG Financial Adviser Partnership Program might be something worth you while to consider.

By partnering with us, you and your clients will have access to the group’s end-to-end, holistic service suite across financial planning, estate planning, property sales, property management, property advocacy, tax & accounting (business & personal) and mortgage & finance.

For more information about our partnership program, please visit: https://thehopkinsgroup.com.au/l/financial-advisor-partnership-program/ or click https://thehopkinsgroup.com.au/app/uploads/2022/12/Financial-Advisory-Partnership-Program_One-Pager-1.pdf for the program fact sheet.

Alternatively, you can book in a confidential, obligation-free appointment via the link below:

https://outlook.office365.com/owa/calendar/BookaPrivateandConfidentialChat@thehopkinsgroup.com.au/bookings/

Victorian Budget 2023 impacts

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The Victorian state budget for 2023-2024 has both positive and negative measures for taxpayers. It is also geared towards helping the government repay its COVID-19 debt, and as a result, measurements are made, and they have a significant impact on several industries and financial plan holders.

In this article, we will outline the major measurements made, their impact to different key Australian demographics and their impact:

Family Homeowners – Generally Positive

The budget includes positive measures for family homeowners and first home buyers. There will be a new first homebuyer grant program with a $250 million investment, making it easier for you to buy your first home. Additionally, a $100 million investment in a home renovation grant program will support home improvements.

However, there is a temporary increase in stamp duty on residential property purchases over $1 million, which may have a negative impact on family homeowners or those with a single mortgage. This increase in costs should be considered when planning your repayment budget.

 

Small Business Owners – Generally Positive

For small business owners, the budget has mixed implications. On one hand, there are investments in new resources and support, such as a $50 million small business accelerator program and a $10 million small business grants program.

On the other hand, changes to WorkCover means further increased operational costs.

 

Older Victorians – Positive

The budget aims to improve the quality of life for older Victorians with a $250 million investment in an aged care reform package and a $100 million investment in a seniors’ transport program. These measures should positively impact your quality of life as an older individual.

 

High-Income Earners – Generally Negative

High-income earners may experience negative effects due to increased taxes. A temporary payroll tax surcharge of 0.5% for businesses with national payrolls over $10 million and a temporary increase in stamp duty on residential property purchases over $1 million will increase their tax burden.

The temporary increase in stamp duty on residential property purchase over $1 million dollars also negatively impacts higher incoming earners looking to purchase a home in the near future.

However, the payroll tax-free threshold will be raised from $700,000 to $900,000 from July 1, 2024, providing some relief for high-income earners.

 

Property Investors – Negative

Property investors may face challenges with the budget’s measures. The temporary increase in stamp duty on residential property purchases over $1 million and the lowering of land tax threshold from $300,000 to $50,00 will significantly increase the cost of maintaining a property.

 

What Should I Do Next?

If you are concerned about how the budget may affect you or to explore how to mitigate the impact of the budget has already affected you, please do not hesitate to contact your financial advisor.

We can help you understand the budget’s impact and discuss your options to protect, secure and ensure the long-term growth of your wealth.

To book your online or face-to-face no-obligation consultation, please click this link.

If you are a client of The Hopkins Group, we encourage you to speak to your THG financial advisor directly. To book a meeting with your THG adviser, please click the link.