Afleveringen
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If you have equity in your home and are wondering what to do next, chances are youâve thought about using it to buy a residential investment property.
But what happens when you want to take your property investment to the next level? There is another way to successfully grow your equity, set yourself up for retirement and see higher yields: commercial property investment.
Whether you're a seasoned investor or just beginning your financial journey, understanding the nuances between commercial and residential property can open up a world of opportunities.
In this episode, we'll explore:
Breaking Down Commercial Property Investment
Commercial properties have a potential for higher rental yields, making them pretty appealing. Imagine earning yields from 5% to over 10%; thatâs starkly higher compared to the typical 5% yielding residential counterpart.
A commercial property lease also often covers most expenses; the tenants pay for water, rates, and even repairsâsometimes making it a more hands-off investment experience.
Who's Suited for Commercial Property Investment?
While residential properties offer a gateway to owning physical assets, their loans often come with easier termsâsometimes covering up to 95% of the purchase price. In contrast, commercial property requires heftier upfront investments, with deposits ranging from 20% to 40%. Utilising your property equity can bridge this financial gap, activating the power of otherwise dormant assets.
My Personal Commercial Property Journey
My husband John and I once invested extensively in residential properties across Queensland, a route initially taken to ease our tax burdens. But the constant management and cash flow constraints during sensitive life periods (like maternity leave) proved taxing. I share why the switch to commercial property in 2019 was a game changer for us.
Property investment, whether commercial or residential, is rife with complexities and rewards. It's vital to weigh the potential return against personal circumstances and market volatility.
If our discussion on commercial property has struck a chord with you, don't hesitate to reach out. Our team includes a buyerâs agent who would love to explore how commercial property might fit into your investment strategy.
Until next time, take care and enjoy your money management!
Links
Want to know more about commercial property? Join our commercial property mailing list here:
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Book a free 15 minute discovery call with Alissa: https://calendly.com/gtag
Website: https://goldentrianglefinancegroup.com.au/
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I probably get two calls a week from clients asking me how to buy property inside their Self-Managed Super Fund (SMSF).
SMSFs can be a little tricky to get your head around, and itâs a rabbit hole my husband and I are still going down almost two years into deciding to set one up ourselves. However, Iâm going to break things down and give you an overview of what to expect if youâre going down the SMSF property purchase road.
We'll discuss:
Why You Would Use Your SMSF to Buy Property
One of the main reasons people turn to their SMSF for property investment is the limitation in borrowing capacity outside of the fund. Often, they find their borrowing power maxed out, but see potential in the nest egg they've accumulated within their super fund.
Understanding Costs and Limitations
Acquiring property within an SMSF does come with its challenges and costs. Unlike purchasing a home outside your SMSF, where bank-related costs are relatively minimal, buying within an SMSF involves considerable expenses. This includes application fees, valuation fees and additional costs for commercial properties.
Assessing Borrowing Capacity
Traditional lending considers personal income, expenses, and existing debts. In contrast, SMSF borrowing bases its calculations on annual contributions, the rental income from the acquired property, and any income from existing assets within the fund.
Equity, Set-Up and Management Costs
Here's a key difference: unlike property outside super, you can't leverage the equity of a property inside your SMSF to buy more. If a property within your SMSF appreciates, you must sell it to utilise its equity for further investments. This limitation can be a significant drawback.
Before venturing into SMSF property purchase, Iâd suggest consulting with an accountant and, if needed, a financial planner. Educate yourself well, because managing an SMSF requires quite a lot of work, dedication and precision.
If youâre ready to jump into your SMSF property purchase adventure, I'm ready to help you - so be sure to reach out!
Links
Website: https://goldentrianglefinancegroup.com.au/
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Zijn er afleveringen die ontbreken?
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Buying your first home is a significant milestone, filled with excitement, anticipation, and let's be honest, a little bit of stress, too. A lot of clients that I speak to fine the whole process quite overwhelming, and I understand why. I've got some valuable information to share that might just make your journey to home ownership a little smoother.
Iâll be covering three essential government initiatives designed to help first-home buyers in Australia: Stamp Duty Concessions, the First Home Owner Grant, and the First Home Loan Deposit Scheme. These schemes can offer you substantial financial relief if you're eligible, so itâs worth reviewing what options may be available to you.
Understanding Stamp Duty Concessions
First up, stamp dutyâwhat exactly is it? Essentially, it's a state government tax applied to the purchase price of a property. The good news is, if you're a first-time home buyer, you might qualify for significant discounts on this tax. However, there's a cap; for instance, in Queensland, the purchase price needs to be under $600,000 to benefit from the concession.
Remember, the particulars of this can vary from state to state, so itâs crucial to do some research specific to where you're buying. A simple Google search with terms like âStamp Duty Calculator [Your State]â can give you a quick estimate of what you might have to pay.
The First Home Owner Grant
Next on the list is the First Home Owner Grant, a federal initiative. This is a straightforward grant of $30,000 for eligible buyers, but there are some strings attached. The new house must be under $750,000, and it has to be recently built. Youâll need to live in this new home for at least six months and move in within a year of purchase. Unlike some schemes, there's no income test for eligibility, making it accessible for most, as long as you plan to live in the home.
First Home Loan Deposit Scheme
Lastly, let's talk about the First Home Loan Deposit Scheme. This initiative allows you to purchase a home with as little as a 5% deposit without the added burden of paying Lenders Mortgage Insurance (LMI). The key criteria include your income; if youâre single, your income can't exceed $120,000, and for couples, the limit is $200,000. There are also caps on the property value depending on your regionâfor example, up to $650,000 in regional Queensland.
One thing to note: lenders might require you to use your entire deposit, even if it exceeds the minimum requirement for this scheme. While this could be inconvenient, it's all about striking a balance between getting into your home and maintaining some financial wiggle room for expenses like renovation and furnishing.
Understanding these three main grantsâStamp Duty Concessions, the First Home Owner Grant, and the First Home Loan Deposit Schemeâcan provide critical financial support as you step into the intimidating, yet rewarding journey of buying your first home. If youâre looking for personalised advice on your borrowing capacity, donât hesitate to book a call with us.
Links
Website: https://goldentrianglefinancegroup.com.au/
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What exactly is equity? Itâs one of those financial terms that gets thrown around frequently, yet often leaves people scratching their heads.
In this episode, we'll break it down and also explore how you can leverage your property's equity to purchase another property, substituting it for cash.
We'll discuss:
Equity Explained: The BasicsCapital Growth and Its Impact on EquityWhy Equity Matters and How to Use ItLeveraging Equity for Property InvestmentA Practical Example of Equity in ActionUnderstanding the Borrowing ProcessMaking the Most of Your EquityAt the end of the day, understanding how to make the most of your equity can set you on a path to financial growth and opportunity. If this conversation has sparked an interest in exploring your own equity options, don't hesitate to reach out. We'd love to assist you in unlocking the financial potential of your property and guide you through the possibilities.
Links
Website: https://goldentrianglefinancegroup.com.au/
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Iâm the first to admit that I havenât always been the best with money. Like many, Iâm continually learning, and yes, sometimes I spend money on things I shouldnât. Discipline isnât always my best friend, but I strive to be consistent, adhering to something akin to the 80/20 rule: 80% of the time, I stick to good financial habits, and for the remaining 20%, I simply aim to learn and adjust.
So how do you set yourself up for a better financial future, I have five tips to share that will help you get started.
Tip #1: Pay Yourself First
The first habit I want to share is to save 10% of everything you earn. This is especially crucial for young adults and teenagers. If youâre just starting your financial journey, stash away 10% of your earnings in a place you canât easily reach. For adults, consider directing this into a home loan or an account set for emergencies. Prioritise saving as the very first thing you do on payday, automating it if you can. Your financial health should be non-negotiable. Start small if you must, but start somewhere.
Tip #2: Embrace Budgeting
While the idea of budgeting can make some peopleâs eyes glaze over, I believe itâs absolutely essential. Set a family budget and review it regularly. This means knowing where every penny is going, from school fees to groceries and savings. When unexpected expenses do arise, a well-crafted budget will help cushion the blow. The peace of mind that comes from knowing your financial footing far outweighs the initial boredom budgeting might bring. Itâs a plan that prepares you for both planned expenses and surprise costs.
Tip #3: Preparing for a Growing Family
For those considering starting a family, my advice is to practice living off one income well before the baby comes. This method helps you adjust to a lower income, enabling you to identify any areas where you might need to cut back. Save the other income entirely for big expenses or future needs. Itâs about readjusting your lifestyle before necessity forces the change.
Tip #4: Mindful Shopping
A stylist once gave me great advice: when tempted by a sale, ask yourself if youâd purchase the item at full price. This question can prevent impulsive buys that ultimately sit unused in your closet. Carefully considering purchases, especially during sales, can help you avoid filling your life with items you donât truly value.
Tip #5: Unsubscribe from Marketing Temptations
Unsubscribe from marketing emails. Itâs a simple yet powerful tip, especially during high promotion periods like Christmas or Black Friday. Without the constant lure of sales, itâs much easier to stick to your financial goals.
Tip #6: Plan Your Meals
Meal planning not only saves time but also significantly trims your grocery bills. By shopping once a week with a clear plan, youâre less likely to be drawn into impulse buys that add up over time. Itâs one of those small steps that lead to big savings.
None of these tips are groundbreaking by themselves, but combined, they can transform your financial landscape. Itâs the small, consistent steps that drive big changes over time.
Links
Website: https://goldentrianglefinancegroup.com.au/
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Today, I want to talk about something crucial that can shape your financial journey: the difference between good debt and bad debt. You'll learn how to identify the difference between the two and discover strategies to manage your financial obligations effectively.
So, why do we need to understand good debt versus bad debt? Many people are just embarking on their financial journeys, and others may never have been taught these differences. Identifying these can be crucial for financial health and planning.
Good Debt vs Bad Debt
Bad Debt: This is the debt you've accumulated buying items that don't grow your wealth, like furniture, cars, holidays, credit card spending, and more. They're called "bad" because they don't generate income and aren't tax-deductibleâonly dragging you down with interest payments.
Good Debt: In contrast, good debt contributes to potential future wealth. This might include an investment property or loans taken out to buy shares. These investments generate income, making the interest tax-deductible and integrating positively with your financial plan.
Practical Strategies
Determining whatâs good and whatâs bad debt is part of my job, and I advise clients to repay any bad debt quickly. For example, if you have a home loan (not income-producing), I actually consider this to be bad debt, and you should aim to pay it off swiftly. Meanwhile, if you have an investment loan, focus on paying off the home loan first.
If you have considerable bad debt, list it out and start the snowball method: knock off the smallest amounts first to permanently close those debts. Then, proceed to the bigger debts. This method not only clears your debt but also builds additional financial capacity for future investments.
Your Financial Path
Remember, every personâs financial journey is unique. If youâre nearing a payoff on your home, consider utilising that equity for investment to build a more robust financial portfolio. Collaborate with professionals to shape the strategy best suited to your needs.
Links
Website: https://goldentrianglefinancegroup.com.au/
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Finances can feel like a topic shrouded in secrecy, something we're taught not to discuss openly. Whether you're a teen or in your sixties, understanding the best ways to use your money can be empowering. Here's a decade-by-decade guide to help you make the most out of your income, no matter where you are in life.
Teenagers: Building Foundations
Letâs start with the teenage yearsâa perfect time to begin cultivating good money habits. My biggest tip for teens is to save 10% of everything you earn. Whether it's from a part-time job or birthday money, paying yourself first and setting aside that 10% is crucial. This habit will build you a nice little nest egg and teach you the discipline of saving early on.
20s: Step into the Property World
Your twenties are a time of exploration and laying down crucial financial foundations. While it might feel challenging, buying a propertyâwhether to live in or as an investmentâcan be a game-changer. This decade is the time to get your foot on the property ladder and think about long-term goals. Remember, property values can fluctuate, but historically, they've trended upward.
30s: Strengthening Your Financial Health
By the time you hit your thirties, you may find yourself more settled in your career and perhaps thinking more about the future. If you havenât already, continue saving that 10% and consider increasing your superannuation contributions. An extra $50 per pay period can make a significant difference down the line. Itâs all about making consistent contributions over a long period to ensure you have a secure financial future.
40s: Investment Insights
This is when financial strategies start to ramp up! If you havenât already ventured into investment property, now might be the time. Leveraging the equity in your existing home can open doors to additional income sources and asset growth. This decade is about ensuring that your financial future is as secure and fruitful as possible.
50s: Focus on Freedom
It's time to pay off your principal place of residence if you haven't already. Owning your home outright by retirement is one of the greatest financial freedoms you can grant yourself. This is the age to focus on clearing that mortgage, ensuring your retirement years will be less financially burdensome.
60s and Beyond: Retirement Reality Check
Your sixties are all about maximising your retirement funds, ensuring that you've got enough to live comfortably. Increase your contributions to super if you can here and investigate strategies like salary sacrificing. Consulting with a financial planner can provide tailored advice to maximise your retirement savings and plan effectively for this next chapter of life.
No matter where youâre at in this roadmap, I highly recommend seeking guidance from a financial planner. They can offer personalised advice to equip you for each life stage. Although their services can be costly, especially in the later years, they can save you money and stress in the long run.
For further reading on this topic, I recommend "The Richest Man in Babylon" by George S. Clason. It's a timeless read that distils key money management principles through engaging parables. Whether youâre just starting out or well along your financial journey, this book will offer valuable lessons.
Here's to building a secure, financially prosperous future, one decade at a time. Until next time, stay wise with your money!
Links
Website:
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Many of us shy away from talking about finances, leading to a lack of open discussion and the perpetuation of bad habits. That's what we're here to change. As a mortgage broker who sees the ups and downs of financial decisions every day, I'm here to share some common pitfalls people unknowingly fall into, and how to steer clear of them.
Understanding Your Credit History
One common mistake is a lack of understanding about credit history. It's essentially a record of all your financial decisions, good or bad, and it significantly impacts your ability to obtain finance in the future. Many young people unknowingly damage their credit by making too many applications for loans or credit cards. Even if you don't go through with a loan, just applying can leave a "dirty mark" on your credit history. Be cautious about the number of applications you make; they might come back to haunt you.
The Importance of Making Payments on Time
Another mistake is missing payments. Even when you have enough money, being disorganised about where your funds are can lead to missed payments, which banks do not look kindly upon. Consistency is key to maintaining a good financial record. Always ensure the right amount is in the correct account when payments are due.
Building a Safety Net with Savings
A major error is not having savings, particularly for those with families. An emergency fund is non-negotiable. Whether it's medical emergencies, sudden repairs, or unforeseen events, having a safety net prevents reliance on credit and the cycle of debt. Depending on your circumstances, aim to have a few thousand dollars at least saved up as a buffer.
Utilising A Budget
While it might seem boring, having a budget is crucial, especially in today's cost-of-living environment. My husband and I take the time every pay cycle to review our budget, ensuring we're aligned on necessary outgoings and planned expenses. It's a simple routine that provides clarity and helps us prioritise.
Avoid Dipping into Your Superannuation
And finally, don't make the mistake of dipping into your superannuation unless absolutely necessary. What seems like a quick fix now could severely impact your financial future. Keep it there to grow, ensuring you have a stable retirement without depending on your children for support.
If any of these points struck a chord, you're not alone, and you can make changes today. These insights come from a place of experience, not judgment. My goal is to share knowledge in hopes it benefits you and prevents costly mistakes. For more on building better habits, I recommend reading "Atomic Habits" by James Clear. It might not be directly about money, but developing good habits can significantly impact your financial life.
Links
Website: https://goldentrianglefinancegroup.com.au/
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Starting a new business is an exciting and challenging venture. As a new business owner, you're likely juggling multiple roles and responsibilities, from managing operations to nurturing client relationships. One of the biggest hurdles you might face, though, is not just running the business itself, but navigating how your business decisions, particularly financial ones, impact your personal financial goals.
When running a small business, it is common to work closely with your accountant to figure out how to legally reduce your tax. Let's be real here: who doesn't want to save money on taxes? However, here's something crucial I've noticed in my experienceâmany people may reduce their taxable income so much that it impacts how they appear to lenders when they're looking to make a large purchase, like buying a home.
I've had clients approach me, handing over their financials, proudly stating they've been in business for a couple of years, only for me to see that their net income is barely enough to get by. They explain how they've managed to get there â through depreciation, interest deductions, and different things like invoice holdovers or prepayments. That's all good â paying little tax can feel like a win, but we need to look at the broader picture.
These financials are not just for keeping the tax man happy; they go to the bank too. When you want to tell a lender, "Hey, look, I make enough to support my lifestyle and fulfil my debts, and now I'm in the market to upgrade to a bigger house," those financial numbers need to back you up.
So, here are my top tips for balancing tax minimisation with long-term financial goals if you're starting a business:
1. Plan Your Financial Future: Start conversations with your finance broker and accountant as early as possible. Let them know your goals for the next year or two, like upgrading to a new home or investing in another property.
2. Understand the Balancing Act: It's crucial to be strategic about how much you minimise your taxes. While it's essential not to pay more than necessary, you need to present your business and personal finances in a way that reflects stability and profitability to lenders.
3. Communicate Openly: Your accountant and finance broker are your allies, not just when it comes to taxes but in your broader financial life. Keep them in the loop about your plans and ensure they understand the narrative you're building for your financial future.
By being mindful of these aspects, you can better position your business to support your personal life goals, such as buying that dream house. The journey of a business owner is all about finding that perfect balance between managing your current financial needs and planning for future aspirations. With the right planning and communication, you can achieve both your business and personal financial goals.
Links
Website: https://goldentrianglefinancegroup.com.au/
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Money can often feel like a mysterious, taboo subject that we're reluctant to discuss with our friends and family. It's often seen as rude or unsavoury to talk about finances openly, but I'm here to change that narrative. Money doesn't have to be complicated, though it's not necessarily easy either. It all comes down to making those small, consistent steps that can shape your financial future.
With over 20 years in finance, five years as a mortgage broker, and running my own finance and mortgage broking business for the last three years, I have the qualifications and passion for sharing my knowledge with you. Through my work, I've witnessed firsthand the challenges many families face when it comes to managing money. Some have been taught well, while others just need a few tweaks to change the trajectory of their lives. And then there are those recovering from costly financial mistakes.
In "Teach Me Money," we'll break down the how, why, and what next of money management in a straightforward way. I'll tackle your toughest questions, debunk common myths, and most importantly, offer actionable tips to help you get ahead. Whether it's making your money a non-negotiable part of every pay cycle or understanding how to finally buy that property to grow your wealth, I've got your back.
If you're just starting on your financial journey or have already faced some bumps along the way, you're in the right place. Join me every fortnight as I dive into practical tips and share inspiring stories of clients who have successfully navigated this path. Together, we'll make sense of money and craft a plan for your financial success.
Please note, this podcast is for general information purposes only and not financial advice. Always consult with a licensed financial planner before making decisions about your personal finances.
