Craig Meathrel in Adelaide, South Australia | Financial service

Craig Meathrel

Locality: Adelaide, South Australia

Phone: +61 431 908 956

Address: Suite 12B, 198 Greenhill Road 5063 Adelaide, SA, Australia

Website: http://www.strategiqwealth.com.au

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07.01.2022 CRAIG'S THREE THINGS ON THURSDAY 27 August 2020 (go to www.strategiqwealth.com.au to sign up to the weekly email) Let’s talk tax savings by contributing money into super.... SALARY SACRIFICING INTO SUPER Salary sacrifice is an arrangement with your employer to forego part of your salary or wages in return for your employer providing benefits of a similar value. One example of a salary sacrifice arrangement is to have some of your salary or wages paid into your super fund instead of to you. This means you get less in your take-home pay, but your super gets a boost. The downside is that you are locking up this money in super until you can access it, most commonly at retirement. The upside is that the money going into super gets taxed at 15% instead of the normal tax rates incurred when it’s paid directly to you. This results in a particularly good tax saving if you are earning over $37,000 pa when your marginal tax rate might be 32.5%, 37% or 45%. The key thing to remember is that the combination of salary sacrifice contributions and your mandatory super guarantee contributions shouldn’t exceed $25,000 in a single year. (There are some other rules that may allow more than this but that’s too complicated to explain today!) I’m a fan of salary sacrificing into super as it is taken from your pay before you see it so it’s a great forced savings technique. TAX DEDUCTIBLE SUPER CONTRIBUTIONS Rather than make an arrangement with your employer to get money into super tax effectively, you can elect to take money from your bank account and make a personal contribution to super. You can then tell you super fund that you intend to claim a tax deduction for the contributed amount. After informing your super fund, you can then reduce your taxable income in your tax return by that same amount. Limits of $25,000pa also apply. Any employer mandatory super guarantee and salary sacrifice also count against this limit. The tax savings are identical to salary sacrificing into super discussed earlier. This method is great if you have unexpected savings just before the end of the financial year and want to get a tax saving and boost your super. SUPER IS AN ONGOING LOW TAX ENVIRONMENT FOR SAVINGS The other good news is that once the money has been placed in super, the tax on any investment earnings is capped at 15%. This can be preferable to investing the money in your name when your marginal tax rate might be a higher 32.5%, 37% or 45%.

03.01.2022 CRAIG'S THREE THINGS ON THURSDAY - 10 SEPTEMBER 2020 So what are the best options for holding money at close to no risk for the short term? HIGH INTEREST SAVINGS ACCOUNTS... I realise that with interest rates as they are today it hardly seems right to call them ‘high interest’ accounts. Probably ‘Higher Interest’ is a better description as they offer higher interest than regular accounts. A good place to compare options is via the Canstar website. See link below: https://www.canstar.com.au/compare/savings-accounts/ Canstar research indicates that the highest rate available is via Rabobank. They are offering 2%pa for the first 4 months but then the rate unfortunately drops to 0.55%pa. Not great for the longer term. If don’t want to have to switch banks after 4 months, a good option is UBank, who is owned by NAB. They are paying 1.60%pa as long as you add $200 per month. The good news is that you can make as many withdrawals as you like. It is important to note that banks often put a limit on the maximum amount that will receive their best rate and base interest rates can change. TERM DEPOSITS Term Deposits aren’t paying as much as some high interest savings accounts. Canstar research says the best rate available for $50,000 for a 12 months term is 1.38% . While you are locking up your money for the length of the term deposit, you have the certainty of a fixed interest rate. PAYING DOWN DEBT If you have debt, placing savings off your loan or into a loan-linked offset bank account will most likely give you a better outcome than placing it in a bank account or term deposit. That’s because the rate is typically much higher. If you are reducing debt, make sure you have a redraw facility if you want to access the money in the future.

02.01.2022 CRAIG'S THREE THINGS ON THURSDAY So what does the evidence tell us about the best away to approach investing? TRYING TO PREDICT THE FUTURE DOES NOT WORK... The investing world is full of people trying to convince us that they can invest your money better than the next person. They also try to convince you that they can pick shares in such a way that they exceed the average return of the stock market. That might be their aim, but the evidence tells us that they will most likely fail. Let us look at professional investment managers that invest in Australian shares and try to beat the performance of the ASX200. (The ASX200 is an index that measures the combined performance of the largest 200 companies on the Australian Stock Exchange) What we know is that 80.79% of professional investment managers underperformed the ASX200 over the last 5 years (data to 31 Dec 2019). Yes, over 80% of investment managers would have done better if they simply made no choices at all and just bought the 200 largest companies. In short, people are paying some investment managers big dollars in fees with an 80% chance they will make poor decisions and leave themselves worse-off. That is crazy! To see the evidence, go to www.spindices.com. You will also discover that investment manager underperformance is consistent across the world. THE COST OF INVESTING MATTERS What the above statistics tell you in that the higher the fee you pay for your super fund or investment, the more likely you are to get a worse result. If the fee is higher, the investment managers has to perform even better to outperform the general stock market. The lesson is this; if you see high fees being changed by an investment manager or super fund, they have just given you a great indicator that their likelihood of underperformance is high. YOUR INVESTMENT PHILOSOPHY SHOULD BE SUPPORTED BY REAL EVIDENCE The good news is that you can invest in a way that is backed by academic research and driven by real evidence. Not surprisingly, you will find this philosophy consistently across all the investment advice I give my clients. After all, chasing higher returns based on a 80% chance of underperformance would be crazy!

01.01.2022 Strategiq Wealth becomes only the second independent financial advice firm in Adelaide! The Australian Securities and Investments Commission (ASIC) now authorises Strategiq Wealth to describe itself as 'independent'. This means the organisation is deemed to be free of any conflicts of interest that can bias advice to clients. We do not have any connections to investment providers, we don’t have a defined list of investments that we push clients into, we refuse to accept even ...a single cent of commission, and only charge straightforward flat fees not linked to asset values. This benchmark is so rarely achieved by advice firms that we have become only the second firm in Adelaide to do so. Importantly, Adelaideans who are serious about achieving their best financial life can now more easily source the kind of financial advice where they will have highest level of confidence that it is centred on their best interest and therefore more likely to help them achieve the financial life goals. See more