Category Archives: Financial Advice

Federal Budget 2017/18: What it means for you…

On Tuesday 9 May, the Federal Government handed down its Budget for the 2017–18 financial
budget 17 18 According to Federal Treasurer Scott Morrison, this year’s Budget is founded on the principles of fairness, security and opportunity. Mr Morrison claims that the government’s proposed measures will raise almost $21 billion in revenue over the next four years, returning Australia’s budget to surplus by 2021.

Here’s a roundup of some of the key proposals put forward, and a look at how they might affect your financial goals — whether you’re starting out in your working life, building a career and family, or enjoying the fruits of your labour in retirement.

Remember, at this stage these are just proposals and not yet law. As such, they could change as legislation passes through parliament.

1. First Home Super Saver Scheme
Proposed effective date: 1 July 2017
From 1 July 2017, individuals will be able to make extra voluntary super contributions of up to $15,000 a year beyond their employer’s Super Guarantee payments, up to a total of $30,000. These contributions will be taxed at 15% and can be withdrawn to go towards the deposit on a first home. Withdrawals will be allowed from 1 July 2018.

What this could mean for you
When you withdraw your extra contributions to pay for a deposit, they’ll be taxed at your marginal tax rate minus a 30% tax offset. While the tax concessions for these contributions may allow you to save a larger deposit, you won’t be able to access your money until retirement if you decide not to buy a home.

2. Contributing the proceeds of property downsizing to super
Proposed effective date: 1 July 2018
Additional non-concessional cap for retiree downsizers
From 1 July 2018, people aged 65+ will be able to contribute up to $300,000 into super from the sale of their principal home, if they’ve owned their home for at least 10 years. The existing restrictions for contributions over age 65 won’t apply for these non-concessional contributions.

What this could mean for you
You may be able to contribute an additional $300,000 to super (or $600,000 for couples), over and above your existing concessional and non-concessional caps. However, if you or your partner receives the age pension, this could cause your entitlements to be reduced.

Taxation – general

3. Marginal tax rates remain unchanged
Marginal tax rates are unchanged from 2016–17. As legislated, the Temporary Budget Repair Levy – which is an additional 2% on the top marginal tax rate – will expire on 30 June 2017.

4. Increase to Medicare levy
Proposed effective date: 1 July 2019
The Medicare levy, which is still assessed on taxable income, is proposed to increase from 2% to 2.5% from 1 July 2019.The Medicare levy low-income thresholds for singles, families, seniors and pensioners will increase from the 2016–17 financial year. The increase in the Medicare levy will be used to fund the National Disability Insurance Scheme (NDIS).

What this could mean for you
The increased levy may also result in increases to many tax rates linked to the top personal tax rate, including fringe benefits tax and excess non-concessional contributions tax.
Certain lump sum super payments that attract the levy may also be impacted, such as disability benefits paid to people under preservation age.

5. Residential investment property – disallowance of deduction for travel expenses and limitation on deductible depreciation
Proposed effective date: Various
From 1 July 2017, travel expenses incurred in inspecting, maintaining or collecting rent on your residential investment properties will no longer be tax deductible. As a residential property investor, you will continue to be able to deduct fees paid to real estate agents or other property managers for these services. In a separate proposal, depreciation deductions for plant and equipment – such as dishwashers and ceiling fans – in residential investment properties will be limited to the actual expenditure you incur. This is an integrity measure designed to ensure that successive purchasers of a property cannot depreciate an asset beyond its true cost.

What this could mean for you
If you’re a subsequent investor in a property, the acquisition of existing plant and equipment will be reflected in the cost base for CGT purposes. Grandfathering applies to plant and equipment that forms part of a residential investment property as at 9 May 2017 and will continue to give rise to depreciation deductions under current rules.

The new rule around travel expense deductions applies to all property investors, including SMSFs, family trusts and companies.

6. Tax changes for foreign tax residents and property owners
Proposed effective date: 9 May 2017
Foreign or temporary tax residents will no longer have access to the CGT main residence exemption on properties acquired after 7.30pm AEST on Budget night (9 May 2017). Also from Budget night, foreign owners of residential property that is not occupied or genuinely available on the rental market for at least six months per year will be subject to an annual levy of at least $5,000.

What this could mean for you
If you’re a foreign of temporary tax resident and you held an existing property before Budget night, the property will be grandfathered and you’ll be able to continue claiming the CGT main residence exemption until 30 June 2019. However, from 1 July 2017, the CGT withholding rate that applies to foreign tax residents will increase from 10% to 12.5%.

Taxation – small business

7. Instant asset tax write-off extension
Proposed effective date: 1 July 2017
The government will extend the existing accelerated depreciation allowance for small businesses by 12 months to 30 June 2018.

What this could mean for you
If your small business has aggregated annual turnover below $10 million, you’ll be able to immediately deduct the purchase of eligible assets costing less than $20,000 where they are first used or installed ready for use by 30 June 2018. After that date, the immediate deductibility threshold will revert back to $1,000.

8. Company tax rate reduction
Legislated from: 1 July 2016
Federal Parliament has now also finalised passage of legislation to reduce the company tax rate. The first step involves reducing the corporate tax rate for companies that are small business entities, from 28.5% to 27.5%, for the 2016–17 income year. Small business entities are classified as companies that carry on a business and have an annual aggregated turnover of less than $10 million. Other companies remain subject to the 30% corporate tax rate. The second step involves subsequent increases in this annual aggregated turnover threshold so that progressively larger companies with annual aggregated turnover under $50 million will qualify for the 27.5% corporate tax rate. For companies with annual aggregated turnover under $50 million the tax rate will progressively reduce to 25% from the 2026–27 income year.

9.Unincorporated businesses – annual aggregated turnover threshold
Legislated from: 1 July 2016
This offset is available to unincorporated small businesses and is currently 5% of the individual’s net small business income tax liability capped at a maximum offset of $1,000 per annum. The annual aggregated turnover threshold from 1 July 2016 is to be increased to $5 million (up from $2 million) for unincorporated business looking to qualify for the small business income tax offset.

What this could mean for you
This small business income tax offset will progressively increase to 16% of an individual’s tax liability related to their net small business income by the 2026–27 tax year. For the 2016–17 to 2023–24 tax years, the tax offset is to increase to 8% (up from 5%).

Families and Social Security

10. New thresholds for HELP debt repayments
Proposed effective date: 1 July 2018
Income thresholds for the repayment of HELP debts will be revised, along with repayment rates and the indexation of repayment thresholds.

What this could mean for you
A new minimum threshold of $42,000 will apply, with a 1% repayment rate. A maximum threshold of $119,882 will apply, with a 10% repayment rate. Currently, the maximum repayment threshold for the 2017–18 financial year is $103,766 with a repayment rate of 8%.

11. Reinstatement of Pensioner Concession Card entitlements
Proposed effective date: 2017 -18
Pensioners who lost their Pensioner Concession Card entitlement due to the assets test changes on 1 January 2017 will have their card reinstated. Those who lost their entitlement were instead issued with both a Health Care Card and a Commonwealth Seniors Health Card. However these cards provided access to fewer concessions than the Pensioner Concession Card.

What this could mean for you
If your Pensioner Concession Card entitlement is reinstated, you’ll have access to a wider range of concessions than those available with the Health Care Card, such as subsidised hearing services. Your Pensioner Concession Card will be automatically reissued over time with an ongoing income and assets test exemption.

You’ll also retain the Commonwealth Seniors Health Card, ensuring you continue to receive the Energy Supplement.

12. Increased pension residence requirements
Proposed effective date: 1 July 2018
An individual currently needs to have at least 10 years’ residence in Australia (at least 5 of which are continuous) to qualify for the age pension or disability support pension. From 1 July 2018, applicants will require one of the following to be met instead:

  • 15 years of continuous Australian residency
  • 10 years’ continuous residence including 5 years during their working life (age 16 to 65), or
  • 10 years’ continuous residence and not in receipt of an activity-tested income support payment for a cumulative period greater than 5 years.
    • What this could mean for you
      This measure may impact you if you have less than 15 years’ residence in Australia or less than 5 years’ residence between age 16 and age pension age. However, existing exemptions will be maintained for humanitarian reasons or if you became unable to work while you were an Australian resident.

      13. Other proposals
      Proposed effective date: Various

    • A new Jobseeker Payment will replace 7 existing working age payments from 20 March 2020
    • Job seekers and parents who receive working age income support will have increased activity test requirements from 20 September 2018
    • The maximum length of the Liquid Assets Waiting Period will increase from 13 weeks to 26 weeks from 20 September 2018
    • A one-off Energy Assistance Payment of $75 for single recipients and $125 for couples will be paid for those who qualify on 20 June 2017
    • Family Tax Benefit rates will not be indexed for 2 years from 1 July 2017
    • A new upper income threshold of $350,000 pa will apply to the child care subsidy from 1 July 2018.
      • Note: What you need to know
        Any advice in this document is general in nature and is provided by Halle Yilmaz, as a financial adviser at HQ Financial Solutions, an Authorised Representative of Lifespan Financial Planning Pty Ltd ABN 23 065 921 735, AFSL No. 229892. Halle is authorised to advice on super, pension and investment products. The advice here does not take into account your personal objectives, financial situation or needs. Therefore, before acting on this advice, you should consider the appropriateness of this advice having regard to those matters, products, and consider talking to a financial adviser before making an investment decision. Your Lifespan adviser or other professional advisers should be consulted prior to acting on this information. Taxation considerations are general and based on present taxation laws and may be subject to change. You should seek independent, professional tax advice before making any decision based on this information. This disclaimer is intended to exclude any liability for loss as a result of acting on the information or opinions expressed.
        Source of the information on this newsletter: AMP, Colonial First State, and Challenger.

        Halle Yilmaz is a financial adviser and business consultant. As a financial adviser, she gives solid advice that can create rapid and lasting results for her clients. Sign up for her free E-Book and download “7 Steps to Healthy Wealth Management.” Follow Halle on Twitter @halleyilmaz

Surprise events happen!

When you invest, be prepared to expect the unexpected.

From time to time, equity markets experience heightened event-related volatility. In such times, it can be helpful to keep in mind “Volatility is a normal part of long – term investment.”

Recently, the decision of the UK electorate to leave the European Union is unexpected, and has resulted in significant amount of economic and global market uncertainty with investors concerned about the increase in volatility and confusion over “what’s next.”

Global-Business-BackgroundThe Brexit decision is more political causing some macro – economic adjustment which has been influencing investors’ behavior towards financial markets. It is expected to be more modest in its effect than the financial crisis or the sovereign debt crisis we experienced in the past.

When it comes to long -term investments, keep a long term view and ignore the day to day noise of markets.In life, there are two things; controllable and uncontrollable. Instead of stressing yourself with uncontrollable, put all your energy and attention into what you can control – discipline, costs and taxes.

Before making any investment, you must know your risk appetite and risk capacity level. Basically you need to understand yourself as an investor, your current situation and what it takes to achieve your long term goals.

Different investments perform differently over time in different economic conditions. Hence, you must understand that risk and return are related, and only some risks are worth taking.

When investing in high risk assets such as shares you need to look at medium to long term investment time-frame. And more importantly you need to understand that during your investment time frame you might come across some form of investment risks such as market risk, liquidity risk, legal, regulatory and international investment risk, currency risk, credit risk and so on. Therefore, with your investment decisions it is important to understand what type of risks you are willing to expose yourself to, and what strategies you can apply to minimize them.

Be aware that in the long term volatility is inevitable. However, staying calm, having a well diversified investment portfolio, sticking to your plan and reviewing it with your financial adviser on a regular basis you would be in a better position to manage it.

We focus on having a process driven and disciplined approach which combined with academic research and practical experiences. Should you have any question or want to discuss on your financial matters contact Halle Yilmaz.

Note: This article is issued by Halle Yilmaz ( Australia) herein is solely for information purposes and shall not in any way constitute advice or an invitation to invest.This material does not take into account your investment objectives, particular needs or financial situation.Before acting on this material, you should consider talking to your financial adviser.

Halle Yilmaz is a financial adviser and business consultant. As a financial adviser, she gives solid advice that can create rapid and lasting results for her clients. Sign up for her free E-Book and download “7 Steps to Healthy Wealth Management.” Follow Halle on Twitter @halleyilmaz

Bursting the Myth of Financial Planning (3)

As a matter of fact, Financial Planning is about how to utilize all of your existing and potential resources more efficiently.

Achieving the best possible results with the limited resources is not only desired by individuals or businesses, even it is also desired by governments. It may not be as easy as it sounds for many people.Whatever it is that you want out of life; first you must be aware of all of your resources.Then you need to assess, analyze them, and develop strategies to achieve the best possible outcomes.It is also the case when it comes to your financial life.

resourcesEffective financial resources management is one of the fundamental things to succeed in any endeavor. It is about how to utilize all your resources including the ones that you might not be aware of more efficiently.Like any planning, financial planning involves assessing, analyzing and developing strategies by using proven processes to make sure you effectively employ all of your resources at the best possible level to achieve your desired goals and needs.

This is the fact that we have limited resources compare to our limitless desires.Like us, things change, economic conditions change and our circumstances change along the way in life. So we must constantly seek for better outcomes with our limited resources.

It is unfortunate that most people do not know how to use their resources more effectively; even some of them do not know that they might have more resources than what they think they have or do not know the best possible ways to get the most out of what they have. Of course, there are some that simply do not care. They would rather continue living as it is because of their conditioning rather than willingness to become the master of their lives.

I believe it is not lack of resources that keeps most people from living their dream lives, from achieving their financial goals, but rather lack of understanding of their options and how to apply them in their lives, and lack of determination to do something about it.

As you can imagine , it is easy to misappropriately utilize your financial resources and feel you do not have enough to achieve what you desire for. One may incline to say that his/her problems would be solved if they just had more money to work with. And having more money to use is certainly better than having too little. But more money may not always result in greater impact if the money is not effectively managed.

Because of lack of understanding of all the available resources and how to use them more effectively,it is possible to simply waste your limited resources too.This, then, can negatively affect your ability to achieve your needs and goals, even it can cause loss of confidence in your ability to accomplish what is possible.

That is why having an outsider professional person/s assisting you understand all your potential resources and how to employ them more effectively in your strategies to achieve what is important to you becomes crucial.Not only this guidance helps you to see how effectively you can make the most of your resources, but also creates an opportunity to notice your money management habits and their impact on your financial and personal life.

Halle Yilmaz is a financial adviser and business consultant. As a financial adviser, she gives solid advice that can create rapid and lasting results for her clients. Sign up for her free E-Book and download “7 Steps to Healthy Wealth Management.” Follow Halle on Twitter @halleyilmaz

Bursting the Myth of Financial Planning (2) – Access to a professional and trustworthy advisor

There are benefits of involvement of a professional financial adviser/planner in your planning.halle for blogHaving somebody as an outsider looking at your financial matters from an objective bases without any emotional attachment can create enormous shift in your financial well-being. As sometimes it is hard to make a rational decision when you are emotionally attached to that decision and its outcome. Under emotional distress, people make poor choices. This appears based on a failure to think things through, caused by emotional distress. All human beings, with emotions we cannot control ourselves, and without them we cannot make decisions either.

That is why having a financial adviser/ planner on your side is very important. Now, with more complex regulations and complex financial instruments you as an investor need an adviser who can provide client-centered expertise in assessing the state of your finances and developing risk-aware strategies to help you meet your goals.

On the other hand, you might need to make sure the adviser have the required skills, knowledge and understanding of what gets involved in your financial matters. The most importantly the person must understand you, your values and your unique set of goals well. Knowing the adviser understands you and your needs, this lead to have your adviser as a listener or sounding board, as someone to whom you can unburden your greatest fears.

A good adviser will listen to your fears, tease out the issues driving those feelings and provide practical long-term answers. An adviser can become your architect, helping you to build a long-term wealth management strategyy that caters to your own risk appetites and lifelong goals.

Even when the strategy is in place, doubts and fears will inevitably arise in your mind. At this point the adviser becomes a coach and helps keeping you on track. Beyond this, an adviser will be a kind of lighthouse keeper or guardian, scanning the horizon for issues that may affect you, your financial life, and keep you informed.

Nothing can stop you having a trustworthy adviser, the choice is yours.

Halle Yilmaz is a financial adviser and business consultant. As a financial adviser, she gives solid advice that can create rapid and lasting results for her clients. Sign up for her free E-Book and download “7 Steps to Healthy Wealth Management.” Follow Halle on Twitter @halleyilmaz

Bursting the Myth of Financial Planning (1) – What it is really about

road mapping lastThere are those who travel and those who are going somewhere. They are different, and yet they are the same. Successful people have this over their rivals: they know where they are going.Mark Caine
They live their lives on purpose – they plan in advance and implement their plan along the way.

Financial planning is about planning; it is not about financial products. However, many people have a misconception when they hear about it. They think it is about financial products that financial advisers/planners are running behind them to sell.

In fact, financial planning is about developing strategies and following through based on our own unique priorities to achieve what is important to us. It is about people and their financial wellbeing now, and in the future. As you can acknowledge that every great accomplishment has a sound strategy behind it. So do financial planning. Imagine, what would your life be like if you had a financial strategy based on what was truly important to you?

To develop a financial plan, understanding your current situation, resources, your goals and values becomes very important part of the process. Then we look at to see whether there is any gap between where you are now, and where you want to be in the future, if there is any, then tailored made strategies will be developed and implemented to remove that gap. It is a very process driven and disciplined approach to accomplish what you want for your future.

Yes, we, financial advisers/planners, use and recommend financial products especially when we see a need in implementing strategies on behalf of you as a client. However, it does not mean financial planning is about financial products. Those products including property, shares, fixed interest products, insurances, superannuation funds you name it, are just financial means to help you set up and achieve your value based goals.

You might think some people do not have a plan, or any particular goal. Actually, when we think what we would like to set out to do with our lives, I can tell you, we often make a “bucket list” for objectives and then apply ourselves to achieving those objectives by utilizing certain instruments or tools. I call it “an informal way of planning.”

In general, some of our goals might take such a short term -like less than 12 months- to be achieved while others take longer. That is why having a properly tailored plan creates our financial road map for success. As it keeps us focus on our ultimate purpose.

Just remember; we, human beings, like consumption products move from one life-cycle to another until we die. Hence, we need planning for each of our life-cycles if we want to cruise throughout smoothly. As you can imagine, a person’s financial and lifestyle needs can be different at the age of let’s say 29 compare to at the age of 39, 49 or 58. Even financial planning needs of both a single person and a couple at the same age can be different. That is why setting in place some personal objectives and arranging financial means to satisfy those objectives in the short, medium and long-term becomes important. It is about understanding what is really important to us, and how to accomplish them more effectively.

At the end of the day, it is your life. You choose how to play in your life either reacting to events when they appear, or taking proactive approach by designing and implementing your plans.

Halle Yilmaz is a financial adviser and business consultant. As a financial adviser, she gives solid advice that can create rapid and lasting results for her clients. Sign up for her free E-Book and download “7 Steps to Healthy Wealth Management.” Follow Halle on Twitter @halleyilmaz

Powerful Ways to Getting Your Financial House In Order

Unfortunately, not only you, many of us spent more than what we could afford financially over the recent holiday season. And now, focusing on paying for those bills might be too stressful.

However, as your 2015 New Year’s resolution, you can stop this uncomfortable experience becoming your perpetual habit by getting your financial house in order.get your financial house in order

Here are some simple but powerful strategies to think on;
Strategy 1:
Behavioral researcher and strategist Dan Gregory says spending is just like any other method people use to fill an emotional gap in their lives. And I strongly believe this is a short term fix to a long term problem.

The first step to eliminate poor financial decisions and making smart ones is to find out your emotions that might have been sabotaging your financial life.

Strategy 2:
To help you, although many people dislike hearing, I would say “develop a realistic budget/cash flow“. It is the best way to reduce unnecessary expenses. As it provides you with a snapshot of how much money comes in and goes out, and what all these spending are for.

Strategy 3:
Accessing information, comparing products or their prices within our high tech environment is only a click away. Rather than setting and forgetting, gaining the habit of shopping around for a better deal on your credit card, phone and internet, and other utility bills even on your home loan can pay off surprisingly well. To reduce time and energy while doing it, as a first step start asking your current service providers for a beter deal.

Strategy 4:
Making extra loan repayments as much as you can may potentially save you thousands of dollars in interest. And never get into your comfort zone again when interest rates fall, instead maintaining repayments during this period can reduce your debt or help you get out of it as quickly as possible.

Strategy 5:
Never underestimate the power of consistently saving certain amount, regardless of how big or small. Pay yourself first. Put some money that you are comfortable with aside and watch them grow over time. Savings to good use in the future is a kind of stress release method.

Strategy 6:
No one wants to hear about “tax“. There is an old saying “you cannot escape from two things in life; one is death, and the another one is tax.” However, you can legally use strategies to minimize your tax. Ask for an advice from your accountant or a qualified financial adviser about it.

Strategy 7:
For peace of mind, review your personal and asset protection plans/insurances if your circumstances have changed – for instance if your loan amount has increased, have recently got married, or your income has increased or you have changed your employment etc. – and make sure they are still enough to eliminate any financial burden to your loved ones if you were no longer able to earn an income.

Strategy 8:
Look after your long term investment – your super fund -. If you have multiple super funds, think about merging them into one so you can reduce the paper work hassle, and potentially save on fees while monitoring it with much ease.

For sure, your best chance of reducing money related stresses comes from developing a financial plan that is specifically tailored for your circumstances and goals. And when things do not go as planned, have the discipline to readjust and flow through again.

Should you want to review your financial plan, or have friends, family members who are worried about their financial health get in touch with your financial planner/adviser.

Halle Yilmaz is a financial adviser and business consultant. As a financial adviser, she gives solid advice that can create rapid and lasting results for her clients. Sign up for her free E-Book and download “7 Steps to Healthy Wealth Management.” Follow Halle on Twitter @halleyilmaz

Behavioural Investing (1) – The power of compounding

Investors’ decisions – both conscious and subconscious – have an important bearing on their long-term wealth. It is often said that “perception is reality.”

When we make decision on our money or investment options our decisions can be heavily influenced by our past experiences, our belief system and by the information we choose to focus on. Successful investing can be hard, but it does not require you and me to be genius. In fact, Warren Buffet once quipped “success in investing does not correlate with IQ.” Successful investing requires the ability to identify and overcome one’s own psychological weaknesses.

In this article, we will prefer to focus on how to benefit from the power of compounding.

behavioural investing imageCompounding isn’t a new concept – many of us will remember studying it back in our school days. Legendary scientist Albert Einstein famously called it ‘the most powerful force in the universe’, while American business magnate John D Rockefeller suggested compounding is the ‘eighth wonder of the world’.These might sound like bold claims, but the power of compounding on an investment portfolio should certainly not be underestimated.

What is compounding?
In simple terms, compounding is the process whereby returns made on an investment are reinvested in order to generate subsequent returns of their own. To benefit from compounding you need to follow rules;

  • You need to be perseverance to save regularly. It might become hard at times when short term temptation triggers spending where self- discipline plays an important role
  • You need to know which investment option helps you get better outcome from
  • Allocate time. You need to be patient, as compound works through time.

The concept of compounding is best illustrated using an example. Twines Annie and Jane both allocated $10,000 to the same interest-bearing investment on their 25th birthday. For simplicity, let’s assume the investment pays interest of 5% per year.

Annie reinvests all of her interest every year, while Jane banks the $500 each year and spends it on everyday living expenses. Let’s see how their investments had fared by their 45th birthdays.

Effect of Compounding over 20 Years

Jane earned $500 interest each and every year for the 20 year period – a total of $10,000. Of course she still had her original $10,000 investment as well.

Annie, on the other hand, saw her investment grow to more than $26,000 by reinvesting her interest. The additional $6,000 she earned over and above Jane highlights the power of compounding. You can see from the table that Annie’s investment is now earning her $1,263 per year, while Jane’s investment is still earning her only $500. This differential would continue to grow over time if the sisters remained invested.

Make compounding work even harder for you

The power of compounding can be magnified if you make small regular contributions to your investment. The long-term performance impact of compounding can be significant and must not be overlooked by investors.

These examples highlight how compounding and contributing regularly to an investment can have a major influence on investment performance. The long-term performance impact of compounding can be significant and must not be overlooked by investors. Perhaps Einstein and Rockefeller were right, after all.

This document has been prepared by HQ Financial Solutions, an Authorized Representative of Guardianfp Ltd trading as Guardian Advice ABN 40 003 677 334 AFSL & ACL No.237641 based on providing for information purpose only. Accordingly, reliance should not be placed on this material as the basis for making an investment, financial or other decision. While all care has been taken in the preparation of this document (using sources believed to be reliable and accurate), to the maximum extent permitted by law, no person including HQ Financial Solutions, Halle Yilmaz or Guardian Advice, accepts responsibility for any loss suffered by any person arising from reliance on this information. Before acting on this material, you should consider its appropriateness, having regard to your financial circumstances and needs, and talked to a specialist in that field.


Halle Yilmaz is a financial adviser and business consultant. As a financial adviser, she gives solid advice that can create rapid and lasting results for her clients. Sign up for her free E-Book and download “7 Steps to Healthy Wealth Management.” Follow Halle on Twitter @halleyilmaz

How Does It Feel When You Have A Solid Financial Foundation?

There is no difference between having your desired physical and financial house. Both of them require the same: a design, structure, the finished work exam and furnishing of each room accordingly.

financial house foundationYou cannot buy the furniture first and put them in a storage room and then to get the design and structure of your house correct. However, many people do it with their financial house, buying all the financial products first then trying to get them fit into their financial house.

It may seem like a simple part of the overall construction process is the foundation, but getting it right before building your rooms to furnish them with the right products is incredibly important. The biggest reason for this is that your entire house sits on top of it! Any mistakes you make in the foundation will only get worse as you go up. You might skimp in the foundation and something fails, I can tell you that it cannot be an easy fix.

A solid financial wealth will also be based on a strong foundation of wealth protection where it will reduce the financial impact of certain events that are out of our control such as premature death, serious illness, total or partial disablement, fire or an accident. Unfortunately, some people underestimate getting the foundation right first. They are all concerned with increasing wealth in their lives, however managing and protecting the wealth, assets and lifestyle they currently have is an extremely important aspect to consider.

Events such as premature death, partial or total and permanent disablement and serious illness (- for instance cancer or heart attack-) will no doubt have an emotional strain however; they can, and often do, have a catastrophic financial strain for an entire family. The consequences of such events can result in unplanned loss of assets and lifestyle changes for you, your loved ones and business partners. Although an event might be a temporary one, the negative financial effects will last for many years.

Therefore, it is very crucial to have a solid structure, which has to support the weight of your wealth building and accumulation plans and goals like those that your physical house does. Do you know that after a building is built you cannot even see the foundations? Hence, it takes 30-40% of the time of building a house just to make sure the foundation is right and strong. The same thing applies to your financial house. Your financial foundation deserves the highest focus and attention.

Although everybody wants to have some form of protection, not many people take the action to have something in place.

Interestingly enough a survey was made by a research firm .The first question was that

What is your greatest hope in life?

The top answers were;

  • To be financially secure
  • To have happiness and security
  • To be sure that my family will be secure
  • To retain my health and my income
  • To have the respect of my family and friends

The second question was that

What is your greatest fear in life?

The top answers were;

  • Fear of insecurity
  • Not being able to carry on for self and family
  • Sickness and unemployment
  • Poverty and death

People have always wanted and will look for security as it is our foundation generally at the cost of personal freedom.

There are four great threats to security: unemployment due to unexpected life events, total and permanent disability, serious illness and immature death. Life insurance offers you the most efficient method of achieving economic security against these four threats. You live, work, and bring home the fruits of your labors. You maintain certain standard of living that may not include Caribbean cruises and golf club memberships, but that do include a home for your family, food, clothing, education, and savings for your retirement.

Life insurance not only insures a life, it insures a way of life. Insurance makes it possible for you to have security and, at the same time dignity and freedom when you need it the most.

Halle Yilmaz is a financial adviser and business consultant. As a financial adviser, she gives solid advice that can create rapid and lasting results for her clients. Sign up for her free E-Book and download “7 Steps to Healthy Wealth Management.” Follow Halle on Twitter @halleyilmaz

Never sacrifice long-term goals with short-term view

Regardless of where we live, what we do for living, we all want to be in control of our lives. We all want to experience financial freedom, live our desired lifestyle and keep our dignity until we die. This requires not only focusing on our short-term goals, but also medium to long term goals NOW.

Unless you are one of the very fortunate few to be independently wealthy, setting aside money today to see that you have enough for the years down the road is mandatory. For those of you who are at their early ages of 20′s and 30′s the idea of saving for your long-term goal – retirement- might be odd and a far away goal. Especially when you are working on fulfilling your short to medium terms (1 year to 5 years) goals.

retirement savingsNevertheless, it is worth noting that the very fact that you are young gives you a huge edge if you want to have financial freedom in retirement. That is because when you are in your 20s, you can invest relatively little for a long period and wind up with far more money than someone older who saves much more over a short period. It is due to the power of compound interest.

Compound interest means that interest accrues not only on the base payments but also on the interest earned. When individuals embrace saving early for retirement and make it a priority throughout their earning years, they put the power of compound interest to work in their favour. As a result, a steady stream of savings can create exponential growth.

Consider this scenario: If you begin saving for retirement at 25, putting away $2,000 a year for just 40 years, you’ll have around $560,000, assuming earnings grow at 8 percent annually. Now, let’s say you wait until you’re 35 to start saving. You put away the same $2,000 a year, but for 30 years instead, and earnings grow at 8 percent a year. When you are 65, you will wind up with around $245,000 – less than half the money.

Saving for retirement is not facing old age or possibility death. It is about gaining the discipline required to take control of your entire life. To support this, the government in your country might offer great incentives to its people. Those incentives can help you accelerate your long-term savings. All you need to do is to be aware of, and make use of them as much as you can.

For instance in Australia, we have superannuation savings, which is something that employers are forced to pay. The government has imposed on employers to make 9% of each employee’s before tax salary paid as a super guarantee contribution into their superannuation funds. This rate will increase to 12% by 2020.The main aim of compulsory superannuation is to ensure we save and invest our money during our working life so that we can live off the earnings in retirement.

Australian demographic reports indicate that Australians are living longer. Currently, life expectancy in Australia is over 81 years. This reflects a higher level of health awareness, better health and medical services, better diet and a safe workplace environment. Hence, it is believed that the age pension the government pays to retires would be insufficient.

The Australian government also knows that most of Australian’s would not have the required discipline to save consistently for their long-term goal – retirement savings – from early ages. Therefore, it is made compulsory not to be accessed the money accumulated in the superannuation funds until fund members reach their retirement age (except certain conditions).

Moreover, in order to encourage people to save for their retirement the government sacrifices its tax revenue. The tax, which is levied on superannuation funds based on the limited tax-deductible contributions (currently it is $25,000 in total per year) and the total of taxable earnings of the fund, is at 15% rather than individuals marginal tax rates.

When super fund members reach their retirement age, they can convert their fund balance into tax-free income streams if they wish.

Additional benefit of superannuation in Australia is that any assets or benefits that individuals have in their superannuation are protected from bankruptcy. It means that, generally, your superannuation won’t become part of the property that is divided between creditors in the event of bankruptcy.

Although the money saved and invested in superannuation environment is part of people’s earned income, because it is not seen or touched, many people neglect it easily. This neglect also comes from lack of understanding of related rules, regulations and complex investment options of the funds.

Nonetheless, superannuation is the most attractive investment vehicle in Australia for those who are serious about taking control of their financial life and maximising their wealth for retirement. It is important to point out those investments in super environment requires regular monitoring and control as carefully as the money invested outside of super.

You might use superannuation environment or another investment vehicle to save and invest. They all are there to take you from where you are financially to where you want to be some time in the future, financially. All you need to do is to gain the habit of not only just focusing on short term financial goals , also focusing on long term ones with the mindset of getting the most out of what is available for you now for your future.

Halle Yilmaz is a financial adviser and business consultant. As a financial adviser, she gives solid advice that can create rapid and lasting results for her clients. Sign up for her free E-Book and download “7 Steps to Healthy Wealth Management.” Follow Halle on Twitter @halleyilmaz

Is Financial Planning really for wealthier?

Some people have misconception that financial advice is only for wealthy people. They feel that there is no need for them to consult a financial adviser.

However, we know that we all need shelter, butter and bread on the table and much more; we all have dreams and goals. We also know that there is scarcity with financial resources. It means we must use our resources more effectively and efficiently by employing appropriate strategies and monitoring their performance to make sure that results match our plans.

It is true that financially wealthy people have financial advisers as they have the mindset to clearly define set of goals and act upon them. They value the professional advice and guidance in order to achieve their goals more effectively.

Failing to plan is the same as planning to fail. Unfortunately, many individuals do not plan. Rather, they just let their financial life happen to them.

Although it is very crucial to step back periodically and set realistic goals for how we want to manage our money and resources, most do not take the time to look ahead and make plans for the future. As a result, we focus on paying monthly bills, rather than planning to achieve a desired goal.

There might be lots of reason behind this attitude, and I believe the most important one is our mindset.

People in general have

  • Fear of making wrong decision. This shows up especially if we do not have enough information or lack of understanding of something in order to make informative decisions.
  • Fear of something being sold to us that we might not need it at all
  • Fear of changing existing habit over a new one and not sure if the new one is good for us.

All is coming from lack of clarity, understanding and therefore of low self-esteem.

However, we all know that

  • economic environment continuously changes
  • our age, social status and life cycle change
  • regulations in each industry , country and at global level change
  • our goals and dreams change
  • the risk tolerance level of each of us changes

In this continuously changing social -economic environment if we want to improve and sustain our financial lives we need to keep ourselves up to date, and if necessary make some adjustments with our options.

No matter what the size of the problem or issue is, consulting to a competent and trustworthy adviser or expert saves you time, money and improve your financial situation significantly. Even if you don’t need an ongoing relationship with an adviser or consultant, there are times when you have financial questions or just want someone you trust to assure you that you’re on the right track is priceless experience .