Do Not Miss Out
My second book, The Bank of Mum and Dad The No Regrets Guide to Helping Your Children Financially, has finally been released today and it’s a must read for any parent or grandparent thinking of helping a child financially to buy their first home or into a business.
Too many parents start with the best intentions and fail to really think through the consequences of what they are doing and the long-term impact it might have on their families.
Only available from my website www.patriciahoward.com.au it will give every parent some much-needed tips regarding the key issues that can in the long run save a lot of heartache and stress.
While I don’t cover this in my new book, one of the most frequent questions I’m asked by clients is how I can best invest funds for my child or grandchild, where they will receive a good return but won’t be able to access it until they are older.
It’s a hard question. Most strategies impact on your child’s tax position and potentially can attract penalty tax rates and it is difficult to give a child money in a meaningful way without them having control over it.
A good option once your child or grandchild starts working, is to make a non-concessional contribution of up to a $1,000 a year directly into their super account.
In doing so your child will benefit from the Federal Government’s Co-contribution scheme where low-income earners who contribute after tax dollars to their super account will receive a co-contribution of up to $500 from the Federal Government.
It really is too good to miss. That’s a 50 per cent up front return and continued investment growth within the super funds. Importantly, the funds are available to be drawn down and used as a deposit for their first home.
Looking to Australia’s investment markets, there is a gathering wave of AI related new listings heading for the Australian share market.
The related media frenzy will prompt many investors to consider whether they should take the plunge and invest in this new technology.
As with all new technology, fortunes both large and small will be made from backing the right companies who get the technology right and manage it correctly and deliver big earnings to their shareholders.
But how do investors spot the winners amongst the flotsam without taking oversized risks and losing more money than they started with?
As I explain in this newsletter, the smart money is on the ‘fast followers’. Those companies who skip the expensive research and development stage by copying or buying proven designs or who learn from the early mistakes of others and so build better cheaper or faster versions of the original technology.
While you can spread your investments over hundreds of companies by investing via ETFs, you are merely spreading the risks, not reducing them. A better, safer strategy is to wait for the clear winners to emerge and then invest in them and ride the resulting wave to success.
Meanwhile many Australians cling to their industry super funds in the often-false belief industry funds are always a cheaper and better option. This is not correct.
Whether an industry fund is the better choice depends on your stage of life, how much you have in super and whether you want to take advantage of the low-cost risk insurance some industry funds provide.
In this newsletter, I walk you through how you can decide if an industry fund is the right choice and explain how recent legal changes means you need to keep a much closer eye on your industry super then you have ever done in the past.
Don’t forget the release of my second book, The Bank of Mum and Dad The No Regrets Guide to Helping Your Children Financially. Only available from my website www.patriciahoward.com.au this is a must read for anyone looking to financially help a family member.
It could be a lifesaving, if not retirement saving, moment for them.
Patricia Howard
0427 429 817
Patricia@howardosmond.com.au