Tag Archives: JBS

Celebrate your family’s financial security

Towards the end of each year we always focus a lot on celebrating Christmas and New Years, however there’s something else we could also celebrate post-Christmas. We’re talking about celebrating your family’s financial security by having personal insurance in place. Having personal insurance cover in place means you and your family won’t have to deal with financial stress in the event of you being unable to earn an income or even passing away. Ideally all your personal insurance covers should be in place prior to the “Silly Season”, however if you haven’t done so already the new year is a perfect time to review your insurance needs.

 

With all the festivities and celebrations over and done with, for most of us it’s now time to pick up the pieces and start the New Year a fresh, which is a perfect time to review your personal insurance needs. Research from one of Australia’s largest personal insurance companies have found that only 37% of Aussies aged between 18-69 actually have life insurance and even more disturbingly only 18% have disability cover and income protection insurance. Further findings include how Australians are grossly underinsured. It’s estimated that the underinsurance gap in Australia is approximately $1.8 Billion, meaning there are a lot of Aussies out there who believe they have sufficient insurance cover, but in fact don’t. For most of us, we don’t like to think about insurance and when asked about how much we have, the first response is usually “I don’t know”.

 

So we come to a point where you should ask yourself, do you need personal insurance? The main reason you would put in place insurance cover, is to secure your family’s financial wellbeing. So if you have a mortgage, loans, kids etc… chances are you will need personal insurance. The question you have to ask yourself is, “if I’m unable to earn an income tomorrow, what would happen”? Then for those of you that already have some form of insurance cover in place, the question you should ask is “how do I know the level of insurance I already have in place now is adequate?” The short answer is to seek professional advice.

 

Whether you don’t have any insurance at all or looking to review your insurance needs, the best thing to do is see someone who is a professional in the area. Financial Planning firms such as JBS Financial Strategists will be able to determine what your insurance needs are and then formulate a strategy to ensure you have the correct and adequate cover in place. So as a new year’s resolution, do yourself a favour by ensuring you have adequate cover in place so you’ve got something else to celebrate about (your family’s financial security).

 

– Andy Lay –


Ins & Outs of Aged Care

It’s hard to be passionate about Aged Care and in fact a lot of the time it’s very overwhelming and daunting, and can be a very emotional time for the family when they have to move a loved one into care.

 

Often one of the biggest questions is how do we fund it!? Especially when it comes to paying the Refundable Accommodation Deposit (RAD), with most people then stressing over what to do with the family home? Add onto that the fact it can be something that could be time critical, and selling a home isn’t something that can be done overnight.

 

The good thing is that this isn’t the only option you have. Although most Aged Care providers will probably try to make you pay a RAD, you actually don’t have to straight away. In actual fact you have 28 days from the date you enter Aged Care to make a decision on whether or not you have to pay a full or partial RAD, or if you want, you could even pay a Daily Accommodation Payment (DAP) or a combination of both.

 

If you elect to pay a DAP at a later time you can then decide to pay a RAD, but it doesn’t happen the other way around, so if you select RAD as your payment, unfortunately you’re stuck on this option. If selling the family home is the only viable financial option, by selecting a DAP you have the flexibility to not rush to sell the home and can instead pay the DAP up until the home is sold and when you can afford to pay the RAD.

 

However, the DAP isn’t necessarily cheap either, it’s normally worked out based on what RAD you are required to pay to secure a room. For instance, if the RAD is $450,000 and the current Maximum Permissible Interest Rate (MPIR) is 5.73%, then your DAP is $70.64 per day ($450,000 x 5.73%) / 365. If you pay a part RAD then you’re also required to pay a part DAP, and an option you have is to have the DAP deducted from the RAD to help ease cash flow.

 

Now you can see why it’s hard to be passionate about Aged Care, you have RAD’s, DAP’s, MPIR’s, and a whole lot of other acronyms that are hard to get excited about, and we haven’t even gone into all the fees yet, yikes!

 

Here at JBS we are passionate about helping our clients through every stage of their life including assisting their loved ones make decisions around Aged Care. When the time comes, rather than stressing about what to do, pick up the phone and talk to JBS. We can help assess what the best option is for you or your loved one and help you put in place a strategy to help fund Aged Care, and where possible help to reduce the impact of the fees.

 

– Peter Folk –



Planning for Dreams and Goals – Brodie

I’m one of those people that love to make others happy, especially my wonderful husband. I’ve written before about how he is a massive Arnold Schwarzenegger fan and this year will be his 70th birthday (Arnie…not my husband).  Anyway, I thought that as a fantastic wife, I’d organise for my hubby to go to Austria, Arnold’s birth country, to celebrate Arnold’s birthday at his childhood home that has now been converted into a museum. Now don’t worry, this blog piece isn’t going to be all about Arnie so you can keep reading. It gets better I promise.

 

What I actually wanted to write about was the process of how I did this. We have two (2) small kids now both at schools, a sizable mortgage (like everyone), our normal expenses and a few unexpected ones too. But what made this doable was deciding to do it. I’ve got the flights booked and paid for, accommodation all booked and deposits made, I just have transfers between places to organise and pay for. But how on earth did I find the casholla to fund it all – short answer is “I have no idea” but the long answer is that I decided that hubby should go. The timeframe was already set for me as everyone knows that Arnold’s birthday is the 30th July, so next was to get the money together and once you’ve decided to do something, the world moves in mysterious ways and it happens. It also happens through savings, selling unwanted stuff, birthday and Christmas presents, but because this was a priority to me, it happened.

 

Looking back in my life, there’s been a number of achievements like that. While I haven’t actively decided and written down specific life goals, I have decided the next thing that I want to do to the house, or with the kids or for my family. I’ve always got something on the go. The last major thing was fake grass in the backyard that set us back a bit, but I found the money as I knew I wanted it before Christmas a couple of years ago as I was hosting the festive celebrations and thought it would look nice for my guests. Before that I hated having lights on in the middle of the day but my kitchen was always so dark and thus a skylight was installed after some money management skills were put to work.

 

I’ve now decided that I need to keep this up. I’ve taken the Christmas break to decide what the next dream I can turn into reality. It seems I’ve already been doing it for a long time and never noticed it. I’ve also worked out that if I don’t have my next goal to work on, that I seem to have no money to do anything. It gets spent and I have no idea on what. I know I’ll never have enough money – most of us won’t – for everything that we want so let’s start focusing on the big things and try to get them. Achieve them. Tick them off a list.

 

It’s also an infectious process with my mum now taking baby steps to achieving the kitchen she wants. She know that she’ll never have the lump sum to do a massive kitchen reno so let’s plan bit by bit. Monday she had an electric cooktop installed that she’s always wanted. Tick and a step closer to her dream. I’m hoping by writing this blog piece that it will inspire you. What’s your next big ticket goal? I’m already saving for a family holiday to Disneyland in Orlando for my 40th birthday…(a few years away – I know you were thinking I looked too young to be 40 – thank you for your kind thoughts 🙂


Cash Flow Management

There’s something about starting a new year that brings with it a tonne of motivation. That fresh start where you can re-set, clean-up, and where energy levels are high and excitement at its peak. Where our passion for giving those dreams of ours a really good shot is reignited and our visions of living bigger and better are at the forefront of our thinking.

 

However, we get to March and the motivation starts to taper off and by April most goals have been abandoned or forgotten about. Research shows, in the end only about 8% of people stick with their good intentions.

 

So what do this 8% do differently? Are they just more willing to invest wholeheartedly to work towards their goals? Maybe, but experts say it has more to do with how they set themselves up for success. Specifically, they use January to re-set themselves and clean up any messes from the previous year, then invest the time and effort into effective goal planning.

 

So with the new year having now kicked off, here’s a list of the best results-driven tactics to ensure you are part of that 8% and make 2017 your best year yet:
Get Super Clear

Vague or generalised goals such as ‘save more’ won’t serve you. They need to be specific and well defined so that they can be measured.

 

–  What?

–  When?

–  And How?

 

Specific goals such as ‘pay off credit cards by March’ are easier to measure. By then mapping out the action steps required it is then easier to achieve the goal than not.

 

But there’s also the why? Connecting emotion with your goals will help you remember why they were important in the first place and will reignite your passion for reaching them when things get difficult.

 

Write it Down

Study after study has shown that those who write down their goals accomplish significantly more than those who don’t. Why? Putting pen to paper forces you to clarify what you want, it motivates you to take action and it makes it easier for you to see your progress and celebrate your successes.

 

Get Support & Accountability

We’ve all heard the importance of being around the right people, especially when chasing our goals.  When you’re in pursuit of a dream, there are many elements that can resist your path and block your forward motion.  Surrounding yourself with people that are genuinely cheering for you will help you disengage from this resistance and keep you moving forward.

 

That’s where JBS fits in. We believe (and know!) that the biggest influence of you achieving your financial and lifestyle goals is firstly to have clarity on what your goals are, then aligning your cash flow to help you achieve those goals. Fortunately for you we have a program designed to help you achieve this.

 

The JBS Cash Coach program is tailored to you, your needs, your goals, and the actions you need to take to achieve those goals.  We take the time to understand you, then design solutions to help you achieve your goals. We help you create a spending and savings plan that is aligned to your goals, and keep you accountable and motivated on a monthly basis to maximise the probability of achieving your goals so you can have the lifestyle you are entitled too in 2017 and into the future.

 

The early part of 2017 is the perfect time de-clutter your life of the excess build up from last year, clean up, clear your head, set motivating goals, and get moving towards those goals.

 

The JBS Cash Coach program will help you get the most out of 2017 but only if you take action. Make time and join the best support network around (aka JBS Cash Coach).


Age Pension Changes

Australians are becoming healthier and living longer than ever before, and the Australian population is ageing.  Each year an increasing number of people retire and many rely either in full or partly on the Age Pension to help fund their retirement.  The Australian Government has made some changes to the Assets Test under the Age Pension which came into effect from 1st of January 2017. The aim of the changes is to make the system more sustainable for the future.

 

Essentially if you’re assessed under the Assets test, that is you receive a lower Age Pension under the Assets test than under the Incomes test, then you may be affected by these changes. These changes are summarised below:

The tapering rates for the Age Pension are also changing, under the current rules, your payment is reduced by $1.50 per fortnight for every $1,000 of assets over the lower asset test threshold. Under the new rules, the reduction is now $3 per fortnight for every $1,000 in assets over the lower threshold.

 

With these changes, those with lower assets will benefit from a higher lower assets test threshold, but those with higher assets may receive a reduced amount of Age Pension or none at all.

 

If you are to lose your Age Pension from the 1st of January 2017 you will be automatically eligible for a Low Income Health Care Card, and most likely eligible for a Commonwealth Seniors Health Care Card.

 

Given the changes to the Age Pension Assets test, now may be a good time to reset your current strategies and look at ways that may help maximise your Age Pension entitlements. There are a few little things you can do to help maximise your Age Pension:
–  Re-value assets – Especially in the case of Home Contents and Vehicles, for Centrelink purposes you only need to record the “Fire Sale” value not the insured value.

–  Gifting of assets – You can gift assets up to an allowable limit of $10,000 and $30,000 over a rolling 5 year period.

–  Superannuation – Money held in the superannuation (accumulation phase) for someone under age 65 is exempt from the Age Pension Assets test. This can be particularly helpful when an individual in a couple is below Age Pension age.

 

Although the above tips may help to maximise your Age Pension there are traps to each one which need to be considered. JBS are pre-retirement and retirement specialists and may be able to help you maximise your Age Pension.  If you or a friend need help with the changes to the Age Pension feel free to give JBS a call.

 


That’s a Wrap

Wow can you believe that 2016 is nearly over? What an exciting year for JBS – transferring to our own licence to allow greater control and flexibility within the business and also gaining some fantasic new additions to the JBS clan.

 

JBS Financial Strategists will be closing at 4pm on Thursday, 22 December and reopening on Wednesday, 4th January, 2017. During the holiday closure the business will be supported via email on strategies@jbsfinancial.com.au or Jen’s mobile phone on 0418 990 988 for urgent issues.

 

We would like to thank you for your ongoing support and commitment throughout 2016.

 

From all the team at JBS, we would like to wish you, your family and your friends a wonderful holiday break, a safe & prosperous New Year and we look forward to seeing you in 2017.

 

We hope you get a laugh from our video – we had plenty making it!!

jbs-xmas


Mistakes People Make When Buying Insurance

Purchasing insurance is the most effective method to protect our families and ourselves, financially against unforeseen circumstances.  Often however, people make simple mistakes whilst purchasing personal insurance cover.  Here are some of the mistakes we find people make.

 

Purchasing insurance online or over the phone without professional advice

 

insurance-2This point refers to all those commercials you see on TV about how you can buy insurance cover over the phone in 5 minutes without any medical and lifestyle questionnaires. When you buy insurance over the phone or online, the assessment process will seem to be very simple and fast.  This type of insurance is what we refer to as direct insurance.  Although simple to implement, direct insurance comes with more risks as direct insurance cover can mean assessment is carried out at the time of claim.

 

For example you might call up an insurer that you’ve seen on TV and get your insurance cover in place. 3 years later you suffer from a medical condition and need to claim. As the assessment wasn’t carried out during the application stage, it’ll be carried out during the claim stage. During assessment process, the insurer will assess you medically and financially for both the claim and from when you started the policy.  If the insurer discovers that you’ve had medical conditions prior to taking out the insurance policy, they could potentially void your claim altogether, meaning they cancel the policy as if you never held it.  This ultimately means you have been paying 3 years’ worth of premiums for an insurance policy which provided you with no cover at all.

 

Going through professionals such as a financial adviser, should mean you’re assessed at the time of application.  Although the process may take a little longer, it means you and your family have some certainty when you are accepted at application time, rather than be declined payment because of something you didn’t disclose during application stage.

 

Only considering price rather than value of the product(s) purchased

 

Price can often play an important part in your decision to buy personal insurance, but it should not be the only factor to consider. Find out about things like:

 

–  Additional benefits and definitions of the policy
–  What types of benefits are included and excluded
–  Claims payment procedures
–  What exclusions or limits exist on the cover
–  Ownership options

 

Price should not be the only consideration when purchasing insurance. That good old saying of ‘You get what you pay for’ applies here. Cheap generally means a lesser policy.

 

Implementing the wrong levels of cover required

 

We often find many people implement insufficient insurance covers in order to save money on premiums or they simply don’t know what to include when assessing their need for cover.  Whatever the case underinsurance could leave you and your family in financial strife.

 

These are just some of the questions you need ask yourself whilst implementing death cover.

 

If you were to die prematurely which option would you prefer for your partner?

–  Repay the home loan and never have to work again
–  Repay the home loan and not have to work for 5 years
–  They lose the house and have to return to work immediately
–  They can fend for themselves

 

Additionally would you also want the following expenses covered?

–  Funds for funeral expenses, medical expenses and legal expenses
–  Funds for the children’s education
–  Funds as an inheritance for kids and your partner
–  Purchasing insurance with premiums that increase as you get older

 

As you get older the chances of you suffering from a medical condition increases, therefore insurers tend to charge higher premiums for older Australians. This causes many people to cancel their cover simply because the premiums (costs) keep getting higher each year with their age.

 

You also have the option of purchasing your insurance with level premiums. This means the premium can be averaged over the lifetime of the policy and will not increase each year with your age (Cover and premiums can increase by CPI).

 

Another option is to reduce your sum insured which will reduce your premiums.  As you get older, your expenses and debts such as the mortgage tend to reduce.  Therefore you can reduce your level of insurance cover depending on your situation, which in turn will reduce the premiums payable.

 

Not reviewing your situation and your cover as life events take place

 

Certain events that occur in our lives can make a massive impact on our financial needs. Events can range from the birth of a baby to repaying the mortgage, receiving a promotion or re-entering the work force.

 

Every time there are certain changes to your life, you need to review your insurance cover. Picking up that phone and having a chat to your adviser, could mean you and your family receive the much needed additional cover. Or it could even mean savings in premiums as the existing cover you have may be too high and needs to be reduced.  Whatever the case it’s important to review your insurance needs every time a certain life event occurs.

 

If you want to know more or thinking about putting in place personal insurance cover, please contact JBS Financial Strategists.

 


What do young investors want?

For a while now, I have heard a few finance graduate friends in their early 20s say “I want to start investing, but don’t know how and where to start’’. When a finance student raises such queries, it’s comparable to a medical student entering an operation theatre and asking which instruments to use.

 

When us youngins hear about investing in stock markets, a mental image of men in dapper suits throwing out technical jargon (DRPs, Options, Hybrids, etc.) that many don’t understand comes to mind. All we know is they are talking money! So what do young investors really want?

 

Sharemarket Perception and what the young investors want

As per the ASX 2014 Share Ownership Study, in Australia 15% of the total youth aged 18-24 and just 25% aged 25-34 own sharemarket listed investments. One of the biggest reasons identified for not investing is that they don’t know much about the sharemarket. Another misconception is that a huge amount of money is required to enter the sharemarket. Post GFC, the inclination towards investing in managed funds has also reduced as the older investors suffered losses in those types of investments. So for the young investors it is a dilemma as to where to start and how to diversify.

 

Youth needsyoung-investors

Broadly, after graduation, there are 3 types of youth;

–  those who know exactly what they want to do in life

–  those who haven’t decided yet

–  those who ‘kind of’ know what they want to pursue

 

All of them have one thing in common, everyone wants to be financially stable or at least have regular cash flow to live the dream, be it travelling, paying off student loans, savings for a home, etc.

 

Today’s Gen Y, we want to have it all. Yes it may be wrong to stereotype all Gen Ys as one, but for argument’s sake let’s consider this assumption. We want fast results, we are go-getters and not afraid to take risks. However when it comes to investing and financial independence, our risk appetite stumbles a bit and I feel it should. These are not easy decisions to make but with the correct attitude, information and expert’s help, the risk level can be reduced.

 

So ideally, we want to save for the future, while enjoying the present and we want all of this, fast! All these wants contradict each other at some level. To save for the future, you have to sacrifice a part of your present income which means sacrificing a part of your present living unless you’re born with a silver spoon or have a billion dollar start-up idea!

 

Need for mixing it up

Historically, Australians love dividend paying shares and there has been a tradition of dividend payouts by the big companies. This is because of the tag of being a safer company and investing in them provides an income. However this does not mean you adopt a defensive strategy by investing in dividend paying stocks. The past few weeks of the reporting season saw 65% of companies increase their dividend by a small amount whereas 14% of the companies cut dividends by a large amount (The SMH, August 29, 2016).

 

Even if a person starts investing at the age of 25, there remains another 30-35 years of working life to save, invest and spend as well. A rough calculation of risk taking in investing is the ‘100 – Age’ formula. Say if you are 25, 75% of your investments should be stocks. Conversely, if you are aged 45, then you should have 55% in the share market. This is because when you are young and you lose money on your investments, you have less responsibilities to worry about and more time to build your wealth back up.

 

I recently read a book “Financial Passages” – by Mercantile Mutual Funds Management which truly said that ‘any money you set aside now has plenty of time to work hard for you’. The earlier you learn by taking risks, the better you will get at investing with time.

 

If you are thinking about investing however not sure where to start, contact the team at JBS today to discuss your personal circumstances.


Congratulations Aakash

On Tuesday night I had the honour of joining Aakash at Deakin University’s Vice-Chancellors Professional Excellency Program Inaugural Dinner.

aakash-award-2

The Vice-Chancellor’s Academic and International Excellence Scholarships are awarded to Australian and International students whose exceptional academic and extra-curricular achievements truly sets them apart.

 

aakash-awardAakash was one of three inaugural scholars honoured on the night and it was a privilege for me to represent JBS as one of the inaugural employers involved in the program.

 

To be part of the Vice-Chancellor’s Professional Excellence Program, the scholars are required to participate in academic mentoring, career and personal development coaching, as well as challenges focused on providing them with professional and personal awareness and growth.  Not to mention that they have to achieve an extremely high level of academic performance.

 

Well done Aakash on your achievement, you are a great asset to the JBS team!