Good for Japan. Good for investors. Good for Australia.
Party politics aside, this is a big positive. Read Here
Rick Maggi. Westmount. Financial Solutions.
06/06/14: The structural challenges facing Australia...
…and what it means for investors.
A sobering, but balanced commentary from AMP Capital's Dr Shane Oliver. Worth a read in this blurry, politics laden post-budget environment. Enjoy! Rick Maggi, Westmount. Financial Solutions.
01/06/14: Budget update (for retirees)
Some further clarification...
The following is a quick, easy to understand summary of some of the key changes impacting retirees. Since the budget was released, we've noticed quite a bit of confusion surrounding the new Age Pension deeming rules (coming into effect from 1 January 2015), and the proposed rules impacting Commonwealth Seniors Health Card holders in January 2015, and July 2014. Hopefully this summary will make things a little clearer.
Of course, these budget measures will need to be passed by Parliament, so it will be interesting to see what the final outcome really is. We'll keep you posted. Rick Maggi, Westmount. Financial Solutions.
13/05/14: Federal Budget 2014/15
Tough Love...
Good evening.
Tonight's Budget announcements, while reasonably tough, were not particularly surprising considering all of the speculation leading up to the event. Of course, passing these measures through Parliament will be an interesting challenge indeed.
With a little luck, our Budget deficit will fall from its current $49.9 billion level to $29.8 billion next year, closing in on surplus territory by 2017-18.
Thankfully, the Government held firm on its commitment not to make adverse changes to superannuation, although changes to social security and the temporary budget levy are likely to impact a number of clients.
Focusing on the financial planning space, the three key areas for clients to consider are as follows:
Personal Income Tax and the Budget Repair Levy
With the exception of the temporary 'Budget Repair Levy', personal income tax and thresholds will remain unchanged from 1 July 2014.
The Budget Repair Levy will essentially be a 2% tax on individual's taxable income in excess of $180,000 pa. The levy is scheduled to last three years (2014-15, 2015-16 and 2016-17).
Individuals with taxable income of $180,000 or below will pay no levy.
Commonwealth Seniors Health Card
At present, superannuation account-based income is excluded from the Commonwealth Seniors Health Card (CSHC) income test, which is $50,000 for singles and $80,000 for couples.
However, from 1 January 2015, the Government will begin including superannuation income to determine eligibility for the CSHC.
Please note that all superannuation account-based income streams held by CSHC holders before the January implementation date will be 'grandfathered' under the existing rules.
Increase the Age Pension age to 70
As widely expected, from 1 July 2025, the Age Pension qualifying age will continue to rise by six months every two years, from the qualifying age of 67 years that will apply by that time, to gradually reach a qualifying age of 70 years by 1 July 2035.
Other measures
There are many other proposals worth noting, particularly in the area of family payments and job seekers. To read a more detailed report, click here.
Over the next few weeks, we'll pour over the finer details and let you know if there is anything else you should be aware of. In the meantime, please feel free to call me personally if you have any questions or concerns.
Rick Maggi. (Westmount. Financial Solutions)
06/05/14: Bank Financial Planners: Tread carefully
80% of financial advisers now 'owned' by the banks
Last night's 'Four Corners' documentary on ABC (watch video here) primarily focused on the shameful behaviour of a particular Financial Planner within Commonwealth Bank's planning division. But more importantly, the documentary also highlights a broader 'conflict of interest' issue with bank advisors generally, and possibly other institutions.
While I suspect that 'bad advisers' (in all professions) will continue to lurk in the shadows forever and a day, the problem highlighted in last night's report goes beyond a single 'rogue' adviser. Rather than a one-off event, the flaw appears to be systemic, possibly stretching across the entire banking wealth management model.
So with over 80% of financial advisors in Australia now directly or indirectly owned by the banks, as a customer, it's now prudent to question the motives behind that humble bank teller who subtly offers to introduce you to their friendly financial planner for a 'second opinion', the next time you review your home loan or term deposit.
And if you believe that your financial advisor is employed by an 'independent', non-bank aligned firm, you now have every right to ask whether that advisor's license is indeed owned by a bank - chances are it is.
Of course, following on from last night's Four Corners report it would be easy to conclude that you simply can't trust financial planners, or anyone else, to look after your hard earned money. That would be wrong (and sad). The reality is that there are more than enough high quality financial advisers out there, doing terrific work, helping clients achieve their dreams - I personally know many of them and wouldn't hesitate recommending these professionals to family and friends.
So expect the best, just ask plenty of questions and do your homework.
Rick Maggi
30/04/14: Smart End of Financial Year strategies 2013/14
The countdown begins...
With the end of the financial year fast approaching, we're commencing a 60 day countdown to assist you in getting your financial affairs organised and ready for the June 30 deadline. Taking action now can open up more opportunities for you. The following guide lists 12 key superannuation and insurance based solutions you should look at. Read Here
As always, we're only a phone call away. So if you would like to discuss your own strategy, tax, superannuation, investment, retirement planning, Centrelink issues or the Federal Budget, please call us on 9382 8885. (Rick Maggi. Westmount. Financial Solutions.)
01/04/14: Rates on hold
…and the dollar surges
Despite concerns over the strength of the Australian dollar (now 0.9296) and a potential property bubble, the Reserve Bank of Australia has, moments ago, announced that it will be keeping the cash rate on hold at 2.5 per cent.
This comes as no surprise as concerns about the strength of the Australian economy still linger, now that the mining investment boom is essentially over. While rising house prices is something the RBA really doesn't want to encourage, the general consensus is that record low interest rates will continue for just a little while longer. Some are expecting rates to be higher by Christmas, or even earlier. We'll keep you posted.
(Rick Maggi, Westmount. Financial Solutions.)
17/03/14: …More on the Ukraine
Worse for Russia, less so for the rest of us
A well balanced update on the subject. Read here (Rick Maggi, Westmount. Financial Solutions)
05/03/14: Ukraine: Relief rally (and then some)
A more conciliatory tone
Russian President Vladimir Putin said he saw no immediate need to invade Ukraine while leaving open the possibility of using force, as the U.S. weighed sanctions on Russia and offered aid to the Ukrainian government.
In his first public remarks since Ukraine said its Crimean peninsula was seized by Russian forces, Putin said yesterday he has a duty to defend ethnic Russians in the region and reserved the right to military action. U.S. President Barack Obama challenged Putin’s rationale for intervening, as Secretary of State John Kerry unveiled $1 billion in loan guarantees to Ukraine’s cash-strapped government during a visit to Kiev.
As a result stocks rebounded worldwide yesterday after Putin’s remarks stirred optimism that the worst crisis between Russia and the West since the end of the Cold War is cooling. Putin said troops stationed in Crimea, where Russia keeps its Black Sea fleet, have only been securing their bases. Gunmen who’ve seized crucial infrastructure and surrounded military installations are acting independently, he said. At the time of writing, the US Dow Jones Index had rallied 227 points to 16,395 overnight while Australia's All Ordinaries Index is up 0.60% to 5,444.
And locally...
Perhaps more importantly, today, Australia's quarterly GDP surprised on the upside posting an annualised rate of 2.8% - higher than the 2.5% GDP rate economists were expecting. When coupled with the announcement today, from Chinese authorities, that their growth rate 'goal' for 2014 will remain at 7.5%, this should add more fuel to the overall optimism currently taking hold of financial markets - great news for Westmount clients. (Rick Maggi. Westmount. Financial Solutions.)
21/02/14: The Economic Clock
Market Update (Friday 21 Feb 2014)
Today the All Ordinaries Index closed at its highest level since 19 June 2008 as Australian company earnings continue to impress, but also following a strong lead from Wall St overnight.
Interestingly, investors have been dismissing disappointing US economic data of late, pointing to harsh winter weather as a reason for unexpected weakness. Instead, investors have been taking a relatively optimistic view, positioning themselves for an improving growth trend in the US, betting that improved earnings will be enough to lift the market further this year.
In other words, sentiment, for better or for worse, is finally taking on a life of its own, pushing up US markets (and in turn our own), despite mediocre to 'ok' earnings results. Of course, we'll need to see concrete improvement over the coming months to justify the optimism, and clearly there are are some headwinds out there if you really want to worry (Fed tapering, lower Chinese and Australian growth, Ukraine debt default etc.), however, for now, our general view remains unchanged - we're still at 8pm, on the 'Economic Clock' (a quaint measure, certainly, but a useful tool just the same) View Economic Clock Here Enjoy your weekend. Rick Maggi (Westmount. Financial Solutions.)
19/02/14: Age Pension Bonus: Last chance to register
Move quickly, deadline approaching!
If you're still working, male, and you were aged 65 or over (or 63.5 or over if you're a female) before September 2009, then you need to read this article.
If you fall into this age group and you expect to receive the Age Pension when you do finally retire, then you need to be aware that the Pension Bonus Scheme (PBS) closed to new members from 20 September 2009. Assuming you fall into this specific age group, the good news is that you can still register for the Age Pension Bonus, but you will have to hurry because applications close 28 February 2014.
Background: The PBS is a scheme to encourage older Australians to defer taking the Age Pension. The scheme pays a tax-free bonus to eligible individuals who work beyond Age Pension age, provided that they qualify for the Age Pension when they eventually retire. The maximum payment available is around $47,000 when you defer claiming the Age Pension for five years or more, and you're eligible for the full Age Pension when you do claim your entitlements. If you're eligible for a part-pension, you may be entitled to a part-Pension Bonus.
According to Centrelink, you will be eligible for the Age Pension bonus if you satisfy the following conditions:
> reached Age Pension age before 20 September 2009 (age 65 for men, 63.5 for women).
> continue to work since reaching Age Pension age.
> have not yet claimed the Age Pension.
> register before 1 March 2014.
If you have already applied for the PBS, then the scheme continues to apply for you, subject to meeting the scheme's 'work test' condition.
Note: Your eligibility for the PBS runs from the time you register, rather than the time you reached Age Pension age.
If you think that you may be entitled for the PBS, we recommend that you immediately make an appointment with Centrelink to formally determine your eligibility. Westmount clients can call our office if in doubt - we'll perform a quick calculation based on your current circumstances - beats waiting in a queue! Rick Maggi (Westmount. Financial Solutions.)
23/01/14: Expect more...
The risk of a share market correction...
Since 1950 the average cyclical bull market in Australian shares lasted 48 months with a 126% gain. The current bull market has gone for 28 months with only a 37% gain. So where are we now in the cycle? Are we heading into a bear market already or is there more growth to come? Read on… Where are we now? Rick Maggi (Westmount. Financial Solutions.)
17/01/14: The Year Ahead
19/12/13: The Fed finally tapers
...and what it means for investors
Overnight the US Federal Reserve announced that it will begin carefully and slowly scaling back its massive stimulus program next month. It is the central bank's first step towards winding back the stimulus that has helped the US recover from its worst recession since the 1930s and a sign that the US economy is recovering.
In response, the US share market surged by almost 2% and at the time of writing, local markets are up by about 1.5%. Our local currency immediately dropped to 88.18 US cents but then quickly recovered to 89.45 US cents as investors digested the news. Most importantly, this should be viewed as good news. AMP Capital's Dr Shane Oliver discusses the implications for investors here. Rick Maggi (Westmount. Financial Solutions.)
18/12/13: Mid-Year Economic & Fiscal Outlook
Game on...
The Government's Mid-Year Economic & Fiscal Outlook (MYEFO), announced yesterday by Joe Hockey, included, among other things, changes and clarification on 92 tax and superannuation measures that were announced, but not legislated, by the previous Labor Government. Of the 92 measures, 34 will proceed, 3 will be amended and 55 will be scrapped. Read the changes here Rick Maggi (Westmount. Financial Solutions.)