Wealth Creation

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Personal Superannuation

Superannuation is a form of savings, where money is set aside by you and/or your employer and invested for your retirement. It is a very tax effective way to save for your retirement. Superannuation can also be a tax effective way of holding life insurance.

What are the advantages of Superannuation?

  • Employers usually contribute at least 9% of your earnings base to your fund;
  • Earnings are taxed at a lower rate compared to other forms of investment;
  • Your investment is added to on a regular basis over a long time; giving the benefit of dollar cost averaging;
  • You may be eligible to receive a tax deduction for your superannuation contributions;
  • It can be a tax effective way of holding insurance;
  • It allows you to diversify your investments over different asset classes;
  • Your superannuation is portable and by different employers.

Given the long term nature of your investment into Super it is important that you are in the right fund and are invested in the right assets to give you the desired outcome at retirement.

Corporate Superannuation

Managing employees' superannuation can be complex and challenging. Precept is a leader in the provision of superannuation solutions and is committed to making super simple for both the employer & employee. It is the employers' responsibility to select a default investment strategy for their company employee super plan. The employer will need to consider their employees' investment needs; but different employees have different needs. Experience tells us that there is no one strategy or option which simultaneously meets all these needs. The financial advisers here at Precept Financial Services are qualified to understand the risk and return associated with the wide range of investment options available and can help you make decisions best suited to meet your needs. They also understand that you need protection against unexpected events and can help tailor insurance to meet their needs. Small differences in both investment performance and fees and costs can have a substantial impact on long-term returns. Your Precept financial adviser will negotiate the lowest management costs possible.

Self Managed Superannuation

Self managed superannuation can give you more control over your superannuation but with this comes the responsibility of being the trustee of the fund. We offer comprehensive advice on Self Managed Super Funds (SMSF's).

Areas where we offer advice are:

  • Setting up and administering the fund
  • Compliance and education of Trustee's roles and responsibilities
  • Investment Strategy
  • Insurance
  • Retirement planning - commencement of retirement income streams
  • Winding up of the fund.

Tax Minimisation Strategies

There are many ways to reduce the amount of tax you pay, just remember to always keep your investment plans in mind and make sure you give yourself a lot of time to review everything before tax time.

Someways to save on tax are:

  • Contribute as much as you can to your superannuation
  • Take as many deductions as you are legally able
  • Look into tax effective investments
  • Salary packaging

Some deductions that may be available are:

  • Self-employed superannuation contributions
  • Income protection premiums
  • Interest/fees on borrowing for investment purposes.

We are happy to work with your Accountant to ensure that the advice provided is incorporated into the financial planning process.

Gearing Strategies

Gearing (borrowing to invest), can be a powerful means to build wealth. It allows you to increase your ability to build wealth by enabling a higher level of investment than would otherwise be possible. You can either positively gear or negatively gear. Positively geared investments are cash flow positive whereas negatively geared investments are cash flow negative (which may be tax deductible).

The Benefits of Gearing:

  • Enables you to understand a higher level of investment than may otherwise be possible.
  • In favourable market conditions, your earnings can be multiplied.
  • Generally, if the cost of borrowing exceeds the income generated from the investment, this excess is an allowable tax deduction.
  • If you borrow to invest in shares you may obtain imputation credits which can be used to reduce the amount of tax you pay.

The Risks of Gearing:

  • An asset may not provide the expected return.
  • The market conditions under which you are borrowing may change. If you over-borrow, rising interest rates could restrict your ability to meet the loan payments.
  • If you rely on the income from the investment/s, there may be periods where it produces little or no income, or even losses.
  • Gearing can multiply your loss.

If you take out a margin loan , and the market value of your investment falls enough to cause the balance of the loan to exceed the maximum lending value of your portfolio, you will be subject to a margin call.

Retirement Planning

Long gone are the days when retirement signified the end of your productive life. With current life expectancies, we can expect to stay fit and active for many years in retirement. Planned well and managed effectively, retirement really is a new beginning, presenting with it many new opportunities.
Retirement planning can assist you to plan and manage your financial situation for your retirement allowing you to maintain a regular income, enjoy life and retire with confidence.

A sound retirement plan can help you:

  • Prepare for your retirement
  • Select the best superannuation
  • Ensure you obtain the maximum tax and social security benefits
  • Secure your assets
  • Utilise tax-efficient strategies to transfer your wealth
  • Plan your estate so your loved ones are taken care of

With the right investment strategy and the use of tax effective income streams (such as allocated pensions and annuities) we can help ensure you enjoy a comfortable retirement.