In our ongoing series about Bonds, I’m going to have a close look today at securitisation of bonds. Wow – what does that mean?!

In simpler terms, what do you have in your favour or possession to ensure your loan is paid back!

Most people I encounter in my travels has at one time or another borrowed money be it for a home, a car or a holiday, and they’ve borrowed money mainly from banks, but also payday lenders, AfterPay or the bank of “Mum & Dad”. Most have also had credit cards which provide a “loan” from month to month, and I’d suggest we’re all very familiar with these concepts.

Investment bonds are no different – remember from my previous blog, an investment bond is a fancy name for a business loan, and in this area of finance, mankind has been doing jigs and various dances for millennia around borrowing and paying back loans - but the basics still remain the same.

Lending money is easy, getting people to pay the money back is the trick!

In the past, when you’ve borrowed money, just cast your mind back to what would happen if you didn’t pay the installments on time – red letters, calls from debt collectors and in the end, redemption/reclamation of a car or a black mark on your credit record. In the big stakes of borrowing, for most of us buying the family home – we took out a mortgage with our local high street bank. If one failed to pay the monthly amount, sooner or later, the bank will come calling, set in a plan to fix up your loan, or simply take your house and sell it to pay the outstanding amount owing. And the big four banks especially are quite brutal when it comes to foreclosure of homes, farms and any other security they’ve held in lieu of full payment, the recent findings of the RC can attest to this.

A house is only worth what someone is willing to pay for it.

When considering investing in corporate grade investment bonds, you need to consider what risk you are taking if the person or business borrowing your hard-earned money doesn’t pay it all back or only some of it.

In today’s blog, I’m covering off some key factors you need to think about when investing in bonds, or similar style mortgage offerings.

Liquidity

Is the security item something that can be turned into cash easily? A tradeable commodity like gold is readily exchanged in the market, but a property will always run the gauntlet of prevailing conditions of a buyers/seller’s market. Is a house in Sydney’s eastern suburbs likely to sell faster than a suburban home in regional NSW? Or outback WA/TAS?

is an apartment in the city more tradeable than a shack in the country?

Value

Is the valuation of the security item trustworthy and up to date? Is the property valued by a licensed valuer with appropriate insurance or the local high street realtor with little more than opinion and a wet finger in the breeze? Or worse still, valued by the agency trying to sell you the investment in the first place – check the valuation and if it is conflicted in any way.

Some business grade bonds rely on utilising business assets as collateral or security for the loan – all well and good, but should a default occur, what is the real, net tangible return of a bunch of computers, office furniture or a $100k printing press to you in reality? Give a thought to the numerous fire sales you may see when businesses go under and think if that was your capital on the chopping block whether you were getting your capital returned, or paltry cents in the dollar.

Loan to Value Ratio (LVR)

When lending money, how much “buffer” or leeway between what is borrowed and the value of the security property sufficiently large enough to cater to market down turns, interest costs and administration of any wind-up action?

High street banks usually lend 80% of the value of the property in question. When appraising a bond investment, what LVR will give you comfort should market prices fall, over what period is the loan being offered or re-appraised and is there sufficient capital if a redemption is needed?

Trust

An intangible element no doubt, is there track record and industry bona fides to back the investment bond that provides for knowledge, experience and integrity in your dealings. When borrowing from the bank of “Mum & Dad”, there is the familial link of trust that hopefully endures!

In the end, if your investment bond pushes money into the market unsecured, then trust is all you have left should the borrower default and not pay their loan back in time (or at all!).

We'll be discussing more about bonds in the weeks to come specifically around secured and unsecured bonds and how interest rates vary as a result. This is really important stuff, what to look for and how they may or may not be suited to you as an investor.

Thanks for reading and feel free to contact me at any time about finances, our new Avalon Beach Investors Meetup or OTG Capital's Investment Trust.

Ray Trevisan is an Authorised Representative (AR:001250963) of Lifestyle Asset Management, who is the holder of an Australian Financial Services License (AFSL:288421). Ray holds a Masters of Management from the University of Technology (Sydney), is a Graduate of the Australian Institute of Company Directors (AICD), NSW Justice of the Peace (JP), an accredited Financial Planner (Dip FinPlng), member of the Financial Planning Association of Australia (FPA) and associate member of the Association of Independently Owned Financial Professionals (AIOFP). He has over 40 years of business and investing experience, and operates the northern beaches office of OTG Capital in Newport Beach, NSW.

Click here to send an email to Ray.

John Collett's article earlier this month highlights much of what I've been trying to tell investors over the past number of quarterly reporting periods.

Interest rates are the life blood of much of the Australian economy because of our obsession with real estate. It could be easily argued without real estate, many Sydney-siders wouldn't know what to talk about at a dinner party!

Collett explains with an RBA easing of interest rates likely because of a soft economy (despite the populist pundits and LNP suggesting otherwise), then investors need to look beyond bank deposits given they were paying an average of 4% 4 years ago, now they're averaging 2.5%, and likely to be heading further down.

"What's the point of putting your money in a savings account?" bemoans one of the article's vox pops - "I don't want to take risks, but I can't afford to be going backwards either!"

In the discussion groups and meetings I attend, most investors either know cash deposits, managed funds (which are mainly equities based) or the stock market (equities). Any discussion around bonds and the conversation dries up. Why I ask? What is the blind spot to bonds?

When I challenge the notion of investors exploring bonds more aggressively, I meet mixed views and suspicion. So let's clear some things up around bonds.

A corporate bond is simply a loan.

When a company goes out to the market and asks to borrow money, and offers to pay it back - with interest, that is a corporate bond. This is different to buying stock, where you take a portion of ownership in the company via a "share", you partake in the profits, dividends and losses of the company. With a corporate bond, you are simply providing them a different form of finance to say a traditional high street bank (like the big 4) or merchant bank.

The variety of corporate bonds is as wide and varied as there are listings in the phone book. The principle around investing in bonds is no different to other forms of investment though, and yes you guessed it - RISK.

Which bonds or other forms of loans are worthy of your consideration as seasoned investors? And are they are viable alternative to dividend laden shares?

Are bonds are a viable investment alternative to dividend paying shares?

We'll be discussing more about bonds in the weeks to come, how to evaluate them, what to look for and how they may or may not be suited to you as an investor.

Thanks for reading and feel free to contact me at any time about finances, our new Avalon Beach Investors Meetup or OTG Capital's Investment Trust.

Ray Trevisan is an Authorised Representative (AR:001250963) of Lifestyle Asset Management, who is the holder of an Australian Financial Services License (AFSL:288421). Ray holds a Masters of Management from the University of Technology (Sydney), is a Graduate of the Australian Institute of Company Directors (AICD), NSW Justice of the Peace (JP), an accredited Financial Planner (Dip FinPlng), member of the Financial Planning Association of Australia (FPA) and associate member of the Association of Independently Owned Financial Professionals (AIOFP). He has over 40 years of business and investing experience, and operates the northern beaches office of OTG Capital in Newport Beach, NSW.

Click here to send an email to Ray.

I'm very pleased to announce a new initiative for this year in getting the word out about better financial education and understanding markets.

As the convener of AIA's discussion group at Collaroy (which we're still continuing this year), I've found education to be the best salve for people looking to invest their hard earned money.

In conjunction with Henry Jennings from MarcusToday, we're starting an Investors Meetup for our local area on Sydney's northern beaches (Avalon to be precise).

Details about the Meetup can be found at this link. The aim of the discussion group is to come together to discuss all matters of interest in and around investing, whether it be elementary financial education right through to equities trading, stock market analysis and thoughts about markets and their directions.

All levels of financial literacy are welcome and we're open to your topics, suggestions and ideas as to how we can run a successful and engaging investing group.

As both Henry and I are industry professionals, please do not come expecting to receive financial advice, we will clearly disclaim early and often our industry associations and ensure all information that we discuss is in the realm of concepts, ideas and education only.

During the year, we will look to invite additional participants in special areas of interest that may include options trading, software solutions for investing, fixed interest/corporate bond specialists etc.

We like you to be able to attend in a "sales free" environment, ask questions, impart/gain knowledge in a friendly, convivial environment.

Thanks for reading and feel free to contact me at any time about finances or our Investment Trust.

Ray Trevisan is an Authorised Representative (AR:001250963) of Lifestyle Asset Management, who is the holder of an Australian Financial Services License (AFSL:288421). Ray holds a Masters of Management from the University of Technology (Sydney), is a Graduate of the Australian Institute of Company Directors (AICD), NSW Justice of the Peace (JP), an accredited Financial Planner (Dip FinPlng), member of the Financial Planning Association of Australia (FPA) and associate member of the Association of Independently Owned Financial Professionals (AIOFP). He has over 40 years of business and investing experience, and operates the northern beaches office of OTG Capital in Newport Beach, NSW.

Click here to send an email to Ray.

I hate to say “I told you so…”

Welcome back from the holiday season. I hope you have a joyous and peaceful time away where ever you went/have been to.

You may recall last year, we ended our time with the stock market having a meltdown and erasing all the gains made throughout the year, only to finish worse off. I’m no expert, but the sugar hit of massive tax cuts for corporations, cutting back of penalty rates and the idea that magnanimous bosses would eventually trickle some wage rise down to the masses was folly, and consumption and growth purely around real estate was always going to end badly.

On a positive note, I won the annual tipping competition for my local Aust Investor’s Association for where the ASX would end (down by some way). Hardly a win really in the grander context of things.

So, the topic for this week’s blog is INTEREST RATES.

For so long last year, I lost count, I kept being told that interest rates could only rise. Why? Because they’ve been at historical lows for 27 RBA meets now, and well, its about time! Right?!! Well no, despite the protestations of the Coalition government, when you cut back wages, outsource jobs abroad, and only provide pay rises to the rich, then consumption and confidence will soon be hit, and hit hard.

In the past 5 years, while jobs have grown, the figures not widely discussed are those for under-employment – doubled to almost 10% now. Government debt has doubled and more in that time, and the nature of the job’s growth is weak/tepid at best. Try asking a young person how easy it is to buy a house when your job is only temporary/casual (well over 1m Australian jobs are now casual/non-permanent), and you don’t have sick leave, annual leave and can be let go at a moment’s notice. And please remember, to be considered employed by the ABS, you only have to work 1 hour / week!

The nature of our real estate heavy economy, what happens when interest rates rise? If the banks have greedily lent too much money to people who shouldn’t have had the loans in the first place, then we’ll have a lot of bad debt floating around the system.

According to the ABC news site this past weekend, the RBA has reached an interesting tipping point, and as my graphic shows, the futures markets are now pricing in a reduction, yes, REDUCTION of interest rates in the next quarter.

Its always too easy to succumb to the weight of the “market” and market analysts, and I have been guilty of the same. But when you have 3 adult children living at home, unable to get full time work, and the right wing press keeps telling me how good things are, then I become suspicious, as well you all should be now as well.

Read widely and read opinions you don’t always agree with, you might just find some truths there as well.

Interest rates are near and dear to my heart simply because that’s how we make our money at OTG Capital, and we’re not shy about saying that. That’s how we make our money!! And if your bank deposits are doing poorly now, then 2019 is not going to be good year - just as last year wasn’t either.

As always, your comments and feedback are most welcome - even if you don't agree with me.

Thanks for reading and feel free to contact me at any time about finances or our Investment Trust.

Ray Trevisan is an Authorised Representative (AR:001250963) of Lifestyle Asset Management, who is the holder of an Australian Financial Services License (AFSL:288421). Ray holds a Masters of Management from the University of Technology (Sydney), is a Graduate of the Australian Institute of Company Directors (AICD), NSW Justice of the Peace (JP), an accredited Financial Planner (Dip FinPlng), member of the Financial Planning Association of Australia (FPA) and associate member of the Association of Independently Owned Financial Professionals (AIOFP). He has over 40 years of business and investing experience, and operates the northern beaches office of OTG Capital in Newport Beach, NSW.

Click here to send an email to Ray.

In wrapping up this year's blog, I want to draw upon a number of themes that will recur in the upcoming year, and maybe some crystal balling as well. When economists of far greater intelligence than I still manage to get it wrong when predicting the future, I guess I have no greater or lesser right to put my collective 2 cents worth.

Thanks for following me in 2018, this is our last blog for the year, and our first blog for 2019 will be in February - thanks!!

Government Direction & Policy

For all the talk of "Jobs & Growth", it would appear (and theAICD's Director sentiments would bear this out), the economy and business direction has pretty well looked after itself. Intervention has had no impact with rates, unemployment, under employment and growth all being worryingly soft for the duration of the year. I'll be looking forward to some real policy debate in the upcoming political arena, but won't be holding my breath.

Interest Rates and Housing

With so much of Australia's ongoing wealth creation and foundation lying within our own property sector, the recent downturn in the Sydney & Melbourne markets will have many pondering what's in store for 2019. Even with the US Fed now dampening its own expectations of further rate rises, I believe the likelihood of any interest rate rises here locally are very low simply because employment figures are soft, despite the government's suggesting otherwise. Rate rises will cause distress that will reverberate well beyond mortgagees, and our RBA will be reluctant to trigger a recession with a zealous approach to the blunt instrument of rate hikes in monetary policy (well how well that's worked for us in the past). The banks on the other hand may still have something to say on this given their recent out-of-cycle 15 basis point hike - more to follow me thinks.

Taxation

Like it or hate it, at least the next election there will be clear choice between the two main parties, and with scare campaigns already being waged by the Murdoch press aiding and abetting the Coalition, it will be interesting to watch the impact of the younger voter - of which many of the outcomes of any Labor proposed changes will have major impact.

And for those of you that hate taxes, Justice Oliver Wendell Holmes, a US Supreme Court Justice in 1927 famously said "Taxes are what we pay for civilized society". So if you like hospitals, schools, roads, national security, it is taxes that pay for them, and proportional taxation is supposedly there to balance the burden between those that can, and those unable.

Would be nice to see national interest out do self interest in 2019.

The Stock Market

I'm not a stock picker at all, and I don't invest in equities because I don't fully grasp them. Even when a company is doing well, market sentiment alone can discount a company's value - go figure. The basis of any company's value will always be its underlying revenues and its future prospects. We've enjoyed a couple of years now of souped up, sugar coated tax relief for companies (that most government budgets simply couldn't afford) - those sugar hits are now coming home to roost, and it is possible that after a prolonged bull run, the bears may feature again in an overdue correction.

So my predictions for 2019?

Stock markets - flat to down from 2018Interest Rates - flat with even a possibility of a rate reduction if mid year numbers aren't good, but up-ticking toward the end of 2019Housing - more pain to come, but up-ticking toward the end of 2019Taxation Policy - depends on the make up of our Senate as neither major party will control the upper house - my crystal ball is too cloudy on that one!!

Keep an eye out in the new year, I'll be writing a dissenting piece of the Franking Credit debate. Some of the key themes that I'm going to covering off pertain to:

History of the Imputation Franking CreditEntitlement - is it justified?AffordabilityImpact on the Little PeopleFranking Credits for Business/othersImpact on Listed Company behaviourInnocent BystandersScare Campaigns and vested interests

As always, your comments and feedback are most welcome - even if you don't agree with me.

Thanks for reading and feel free to contact me at any time about finances or our Investment Trust.

Ray Trevisan is an Authorised Representative (AR:001250963) of Lifestyle Asset Management, who is the holder of an Australian Financial Services License (AFSL:288421). Ray holds a Masters of Management from the University of Technology (Sydney), is a Graduate of the Australian Institute of Company Directors (AICD), NSW Justice of the Peace (JP), an accredited Financial Planner (Dip FinPlng), member of the Financial Planning Association of Australia (FPA) and associate member of the Association of Independently Owned Financial Professionals (AIOFP). He has over 40 years of business and investing experience, and operates the northern beaches office of OTG Capital in Newport Beach, NSW.

Click here to send an email to Ray.

There is no surer way for me to draw the ire and contempt of my fellow investor folk, (particularly many that I meet within the Australian Investors Association) than to raise that old chest nut of the ALPs policy surrounding dividend imputation credits. And if it feels very personal for some, one only has to see recent reactions and protests at investor functions in the past few weeks (see also this article on the AIA website).

Not wishing to be contrarian for the hell of it, it probably comes as no surprise to those that have known me a long time that I'm a supporter of this policy as we conclude this year and head into an election year in 2019, where it will draw and divide many, and partisan politics may not always win the day here, I know plenty of Labor voters who aren't impressed with this policy by any means.

I'm sufficiently moved enough on this that I'm going to write some dissenting views for editorial consideration in the AIA's Investors Voice, their quarterly magazine in which an article that I recently wrote around Fintech should be included in their December 2018 edition (more on that in a future blog btw).

Today's blog is really a forerunner to my piece, but I wanted to draw upon the potential ire of my readership shortly as this goes out in my monthly Shout Outs as well. Some of the key themes that I'm going to covering off pertain to:

So over the coming weeks, I'm going to tackle these matters in my weekly blog, and this will culminate in a longer article that I'll submit for further consideration into the AIA. As always, your comments and feedback are most welcome - even if you don't agree with me.

Thanks for reading and feel free to contact me at any time about finances or our Investment Trust.

Ray Trevisan is an Authorised Representative (AR:001250963) of Lifestyle Asset Management, who is the holder of an Australian Financial Services License (AFSL:288421). Ray holds a Masters of Management from the University of Technology (Sydney), is a Graduate of the Australian Institute of Company Directors (AICD), NSW Justice of the Peace (JP), an accredited Financial Planner (Dip FinPlng), member of the Financial Planning Association of Australia (FPA) and associate member of the Association of Independently Owned Financial Professionals (AIOFP). He has over 40 years of business and investing experience, and operates the northern beaches office of OTG Capital in Newport Beach, NSW.

Click here to send an email to Ray.

Well as a newby to the AIOFPsconference, I have to say what a refreshing change to many other industry type events I've attended over my 40+ years in business.

Never being a big fan of anything nautical, even a river cruise in and around the Main Beach and Southport area of the Gold Coast tested my resilience with motion sickness (yes, I know, just darn pathetic right!!), so the sparsity of food at the beginning didn't fuss me too much. The main attraction was meeting a new cadre of financial services folks who are non-aligned, and with that comes the key focus on their business' bottom line, and how satisfying their customers can lead to better productivity/profitability - yes a refreshing change indeed.

I also had a chance to catch up with former Labor Premier, Nathan Rees talking on the requirements of financial planning in the wake of the current Royal Commission into the finance services industry. The involvement of the FSU as a union affiliated with the ACTUin order to gain the representation at the Federal level could provide for interesting times if Labor is successful in next year's election (I'm not predicting the sure thing that the media is - remember Hilary was supposed to be a shoe-in, and look where we are now) ...

The refreshing change I mentioned at the top of my blog? The presentations were mercifully concise and to the point, but in saying this, I'm still surprised how many will not adequately prepare for a presentation, and let themselves down - oh to have a video camera to playback what was inflicted upon us at times. The greatest tell tale at any event as to listener interest/engagement is the clatter of laptop keyboards and/or the tilting of heads towards smartphone screens. If you're not entertaining them folks, they have their own entertainment now in their hands.

OTG Capital had a great chance to meet new avenues to market through non-aligned planners for our newly launched Investment Trust, and we look forward to working with them in the future. And for those interested, I also found some new, high returning property related investments that might be of interest - wholesale only though folks!

And the venue? Had to laugh at the $8.90 coffees, add the writer's warped sense of humour with a touch of cynicism and sip slowly!!

Thanks for reading and feel free to contact me at any time about finances or our Investment Trust.

Ray Trevisan is an Authorised Representative (AR:001250963) of Lifestyle Asset Management, who is the holder of an Australian Financial Services License (AFSL:288421). Ray holds a Masters of Management from the University of Technology (Sydney), is a Graduate of the Australian Institute of Company Directors (AICD), NSW Justice of the Peace (JP), an accredited Financial Planner (Dip FinPlng), member of the Financial Planning Association of Australia (FPA) and associate member of the Association of Independently Owned Financial Professionals (AIOFP). He has over 40 years of business and investing experience, and operates the northern beaches office of OTG Capital in Newport Beach, NSW.

Click here to send an email to Ray.

I'm writing this week's blog from the AIOFP's 20th annual conference being held on the Gold Coast.

With the opening night's welcome dinner last night, we listened to former NSW Labor Premier, Nathan Rees present an interesting take on the requirements of financial planning in the wake of the current Royal Commission into the finance services industry.

Rees view of the world as a leading advocate of the Financial Sector Union could see numerous planners join a Union affiliated with the ACTU in order to gain the representation required in Federal politics.

Ethics, Stability and Consistency were the key themes the FSU will be pursuing in providing a different view of the world to its membership.

I'll report more in next week's blog as I attend the next 3 days here on the Coast enjoying the beautiful weather and a 1 hour time difference to the rest of the east coast.

Thanks for reading and feel free to contact me at any time about financial advice or our Investment Trust.

Ray Trevisan is an Authorised Representative (AR:001250963) of Lifestyle Asset Management, who is the holder of an Australian Financial Services License (AFSL:288421). Ray holds a Masters of Management from the University of Technology (Sydney), is a Graduate of the Australian Institute of Company Directors (AICD), NSW Justice of the Peace (JP), an accredited Financial Planner (Dip FinPlng) and member of the Financial Planning Association of Australia (FPA). He has over 40 years of business and investing experience, and operates the northern beaches office of OTG Capital in Newport Beach, NSW.

Click here to send an email to Ray.

Having come from the IT industry, we used to have a marketing term that would muddy up the waters so much, consumers barely knew what they were really buying (think mobile phone monthly plans before unlimited use came along) - FUD is the term.

Fear, Uncertainty, Doubt

Make the topic so confusing or open for debate that no one really knew what the answer was, and so in today's news, quite topically as Superannuation has been discussed a lot in my blog of recent weeks is "How much to you need to retire on?"

Ross Gittins, in today's SMH suggests not as much as you've been led to believe. And so this week, I'm looking at what impending retirees should be realistically putting together as a retirement nest egg.

Superannuation laws have changed dramatically in the past 10-15 years, and having a guaranteed contribution scheme in place now since 1996 (thank you Mr Keating!), ensures the vast majority of today's workers will have in place at least some retirement savings. And while the Rudd government legislated a push from 9% to 12% shift in this contribution (allegedly at the behest of the super industry), there is a shift in Canberra now backing this off, and not going for the full amount. Presently at 9.5% of wages, Gittins argues the industry is well poised already to provide sufficient retirement funds for the average Australian retiree in the future.

That's fine for the average punter - the vast majority of clients I meet on a day to day basis don't really care about the average, they care about themselves, and so I'm asking, what is enough for YOU?

The industry benchmark for retirement funding is to provide for at least 70% of your normal monthly income to sustain your usual lifestyle. The smart people suggest that without children, work day commuting, less capital outlays for housing, furniture etc, you don't need as much money.

So as a rough rule of thumb today, what does it take for you to live? I believe it is always best to plan for the best and worst case scenarios. Do you want to travel when you retire, do you want to leave a legacy for your kids? What are your needs and wants? And then work backwards.

The article clearly suggests the super industry is gilding the lily somewhat when suggesting what "living comfortably" is (Gittins reckons that covers the top 20% of earners - wow!).

Work out where you want to live in your dotage and what's going to be left over when you down size (and don't forget the $300k extra super contribution for over 65's downsizing their homes too!!). The Transfer Balance Cap while sounding rather limiting still provides for $1.6M per person. A couple at full TBC levels with $3.2M to invest should be able to pull at least $160k tax free to live on per annum - certainly by my reckoning that's rather comfortable - don't you think?

Thanks for reading and feel free to contact me at any time about financial advice or our Investment Trust.

Ray Trevisan is an Authorised Representative (AR:001250963) of Lifestyle Asset Management, who is the holder of an Australian Financial Services License (AFSL:288421). Ray holds a Masters of Management from the University of Technology (Sydney), is a Graduate of the Australian Institute of Company Directors (AICD), NSW Justice of the Peace (JP), an accredited Financial Planner (Dip FinPlng) and member of the Financial Planning Association of Australia (FPA). He has over 40 years of business and investing experience, and operates the northern beaches office of OTG Capital in Newport Beach, NSW.

Click here to send an email to Ray.

One of my favourite SMH contributors, John Collett has a good piece this week, (as well as the AIA’s upcoming conference in Nov) on where to put your money with the markets appearing to be contracting. Prices of just about all major investment categories are falling, leaving investors scratching their heads about where to find a decent return.

The property market is correcting with tighter credit rules and price expectations moderating. While share markets both in Australia and abroad are looking fragile, interest rates in the US and around the world are on the way up and POTUS appears determined to ramp up the trade war with China.

Your asset allocation - the proportion of your money you assign to different investments - is now more important than ever. If your portfolio is well constructed, this current downturn should not have an overly big impact.

When prices are rising across the board, investors can have a field day getting just about every call right. They become complacent and wonder what the fuss is all about – anyone can make great returns!

But now we are in the "late point in the investment cycle" and decent returns will be much harder to come by, therefore a fundamental investment strategy suitable for a low-growth environment is far more appropriate.

Sharemarket to Underperform

Collett’s article observes the Australian share market face challenges which will make it likely to disappoint when compared to global opportunities.

The big banks have already flagged to the market that their profits will be hit.

Commodity prices could come under pressure as economic growth in China slows, which could put pressure on the big miners - though the prices of key commodities like iron ore and thermal coal remain elevated.

Economists argue the value of the Australian dollar has now fallen close to US70¢ but is likely to fall further below that and into the high US60¢ range. This means investors with overseas holdings are likely to perform more strongly if the foreign currency exposure is unhedged to Australian dollars.

Property Outlook

And Sydney’s favourite dinner conversation? Residential property is tipped to fall by up to 20 per cent over the next two years.

Poor affordability, tighter bank lending standards, out-of-cycle mortgage rate increases and more apartments for sale are all contributing to this pull back, but it is not (and nor ever will be) the carnage we’ve seen in overseas property markets – (call/email for why this is so).

Defensive Options

Again, when economists ponder, some will be right, some wrong. In my view, the next 2-3 years will require investors tempering their expectations and withdrawing to some degree from some of the exorbitant returns we’ve experienced with the sugar hits of debt laden tax cuts. These excesses have to be paid for some time down the road.

With interest rates and bond yields likely to remain low, a well chosen share portfolio may still remain the asset class of choice according to some commentators.

All well and good if you follow equities and manage a portfolio. For those that don’t and prefer less stressful pursuits, index funds, pooled fixed interest offerings may still prove safe, reliable returns are possible without losing any sleep or fingernails in the process.

Diversification!

I’ll keep harping about the power of diversification. Bonds (which is just a fancy name for a loan or a mortgage) will still be in favour and can provide excellent risk/reward returns.

After having such a dream run, we should now be wary about chasing investments that over-promise

Thanks for reading and feel free to contact me at any time about financial advice or our Investment Trust.

Ray Trevisan is an Authorised Representative (AR:001250963) of Lifestyle Asset Management, who is the holder of an Australian Financial Services License (AFSL:288421). Ray holds a Masters of Management from the University of Technology (Sydney), is a Graduate of the Australian Institute of Company Directors (AICD), NSW Justice of the Peace (JP), an accredited Financial Planner (Dip FinPlng) and member of the Financial Planning Association of Australia (FPA). He has over 40 years of business and investing experience, and operates the northern beaches office of OTG Capital in Newport Beach, NSW.

Click here to send an email to Ray.

Thanks to Alexi Boyd at Small Biz Matters, for having me on her radio talk show the other week having had the chance to talk extensively about Talking Money with Children.

As a follow up to that chat, I've had a LOT of response to my conversation towards the end of the show about our kids and jobs, super, wage theft. Really stirred up a hornet's nest - which is GOOD!

I'm so pleased people are approaching me wanting to talk about these matters including my own kids (who are now 24, 22 and 19), so when asked "well what's super and why should I care about it?" - my answer is simple:

How well off do you want to retire?

The answers is almost always - "well off, of course!!", but the sad reality is today, that is simply not achieved by far too many in our society. We must all contend with the knowledge that the social security safety net will not be that safe in the longer term, and if we want to retire well off, that destiny will fall squarely within our own remit.

So some basic tips that I've covered off before when it comes to super and your kids that I implore you discuss with them once they get their first seriously paying job.

1. Contributions are actually made in accordance with your age and legally binding minimum wages according to law. Nobody likes wage thieves, and nobody especially likes their own kids being ripped off. Don't allow your children to work for cash under the table (no insurance), in-kind payments (meals, allowances that aren't that good) or additional unpaid hours.

2. Select a low fee fund that has options for investment, and ensure your kid's employer provides for choice - the law is specific today, you do NOT have to sign up for your employer's super fund, you can chose your own.

3. Consolidate your funds into one fund only. Multiple funds equals multiple fees - don't pay fees for funds you don't require.

4. Life / TPD cover Opt Out. Don't sign up for this cover unless your child is married, has dependents or liabilities (loans, debts) - this cover is oversold and is often NOT required. Federal laws have now been passed that ensures this has to be OPT IN, no super fund can force your child to have this cover - and if they insist - take your business elsewhere.

5. Every cent counts. With the power of compounding, all money saved today can mean thousands when your child retires, so encourage your child to take note of their super fund and its performance. The competition is strong, and the choices provide sufficient options, so don't ever feel trapped. Ring around, do your research, and....

Teach your children well and ingrain a savings culture in their lives now.

Thanks for reading and feel free to contact me at any time about financial advice or our Investment Trust.

Ray Trevisan is an Authorised Representative (AR:001250963) of Lifestyle Asset Management, who is the holder of an Australian Financial Services License (AFSL:288421). Ray holds a Masters of Management from the University of Technology (Sydney), is a Graduate of the Australian Institute of Company Directors (AICD), NSW Justice of the Peace (JP), an accredited Financial Planner (Dip FinPlng) and member of the Financial Planning Association of Australia (FPA). He has over 40 years of business and investing experience, and operates the northern beaches office of OTG Capital in Newport Beach, NSW.

Click here to send an email to Ray.

Thanks to Alexi Boyd at Small Biz Matters, for having me on her radio talk show yesterday. I had the chance to talk extensively about Talking Money with Children.

This eBook is split into three main sections to act as an age-by-age guide for:

* Children (4 to 8)

* Tweens (9 to 12)

* Teens (13 to 18)

The book can be downloaded from this link, and is free.

A precis of what we discussed during show including a link to the podcast can be found at the above link. I can highly recommend it, and if you have children, the advice is just so common sense on so many levels, and some changes in the way kids deal with and use their money can make the world of difference.

A key factor in the future wealth of our children will be not only their education, but also their understanding of how to best save for their retirement (including superannuation and risk cover).

Additionally during the podcast we also talk about protecting our children from unscrupulous employers that don't pay correct wages, super or under the table payments that likely indicate your child will not be properly insured for workers compensation.

Similarly ensure their unpaid internships or trials are exactly that, not some scam for free labour.

Small Biz Matters, operated by Alexi Boyd provides bookkeeping services and is a networker extraordinaire based in and around the Hornsby area!. She runs a weekly radio show on TripleH 100.1FM .

Thanks for reading and feel free to contact me at any time about financial advice or our Investment Trust.

Ray Trevisan is an Authorised Representative (AR:001250963) of Lifestyle Asset Management, who is the holder of an Australian Financial Services License (AFSL:288421). Ray holds a Masters of Management from the University of Technology (Sydney), is a Graduate of the Australian Institute of Company Directors (AICD), NSW Justice of the Peace (JP), an accredited Financial Planner (Dip FinPlng) and member of the Financial Planning Association of Australia (FPA). He has over 40 years of business and investing experience, and operates the northern beaches office of OTG Capital in Newport Beach, NSW.

Click here to send an email to Ray.

As a member of the Financial Planning Association of Australia (FPA), I receive a regular update of information and great supporting education material.

For this week's blog about a having a Will or not (sometimes called a Last Testament too), is a great 1 minute view.

In summary the key points are:

When you're young, dying is not front of mind, so having a Will is not all that important - until you get married or live in a defacto relationship with a partner to consider.

In all, the final great piece of advice is to ensure the Will is kept up to date - and in a safe place either with your family lawyer or if you have a safe at home.

The FPA video can be viewed at this link - we hope you enjoy it!

Ensure your will is in a safe place and kept up to date

Please don't forget at OTG Capital we have a great network of professionals that assist in our daily business transactions that we don't necessarily cover - including legal services. So if you don't have a lawyer or not sure, we'd be happy to recommend someone local to you.

Thanks for reading and feel free to contact me at any time about financial advice or our Investment Trust.

Ray Trevisan is an Authorised Representative (AR:001250963) of Lifestyle Asset Management, who is the holder of an Australian Financial Services License (AFSL:288421). Ray holds a Masters of Management from the University of Technology (Sydney), is a Graduate of the Australian Institute of Company Directors (AICD), NSW Justice of the Peace (JP), an accredited Financial Planner (Dip FinPlng) and member of the Financial Planning Association of Australia (FPA). He has over 40 years of business and investing experience, and operates the northern beaches office of OTG Capital in Newport Beach, NSW.

Click here to send an email to Ray.

It's rather distressing to try to provide financial advice to far too many people that just don't have a clue about the bare basics of looking after their budget, let alone a future financial plan or a safe retirement in relative comfort. And this all starts from when kids are kids and still learning, not just basic maths, but also basic money skills and value.

It is with great pleasure that I'll be part of a community radio program in a few weeks highlighting how we can teach our children better about money and finance. I recently blogged about the FPA's eBooklet about teaching money to children of all ages.

This eBook is split into three main sections to act as an age-by-age guide for:

* Children (4 to 8)

* Tweens (9 to 12)

* Teens (13 to 18)

The book can be downloaded from this link, and is free. I can highly recommend it, and if you have children, the advice is just so common sense on so many levels, and some changes in the way kids deal with and use their money can make the world of difference.

A key factor in the future wealth of our children will be not only their education, but also their understanding of how to best save for their retirement (including superannuation and risk cover).

Small Biz Matters, operated by Alexi Boyd provides bookkeeping services

and is a networker extraordinaire based in and around the Hornsby area!. She runs a weekly radio show and I will be interviewed on 16 Oct at 9.00am, on TripleH 100.1FM . The recording is made available on a podcast afterwards as well.

Thanks for reading and feel free to contact me at any time about financial advice or our Investment Trust.

Ray Trevisan is an Authorised Representative (AR:001250963) of Lifestyle Asset Management, who is the holder of an Australian Financial Services License (AFSL:288421). Ray holds a Masters of Management from the University of Technology (Sydney), is a Graduate of the Australian Institute of Company Directors (AICD), NSW Justice of the Peace (JP), an accredited Financial Planner (Dip FinPlng) and member of the Financial Planning Association of Australia (FPA). He has over 40 years of business and investing experience, and operates the northern beaches office of OTG Capital in Newport Beach, NSW.

Click here to send an email to Ray.

This week we’re going to cover super again, specifically around SMSFs.

It ends up being a never ending source of confusion, angst and sometimes fines and costs that many people simply don’t understand and reluctantly have to work around and with.

Super is a complex subject at the best of times, and many that took up SMSFs years ago at the behest of their zealous accountant now sit and wonder why they bothered at all. The penalties for trustees can be high if you don’t come clean and work with the ATO. (unlike the big super companies, the ATO administers SMSFs, and APRA administers the big super companies)

So this week, I’ve gleaned some very useful information about how to deal with the ATO should you be in an awkward situation regarding incorrect information or reporting issues from a great article in the SMH's Money section. (with thanks to Olivia Maragna).

Trustees have responsibilities

Trustees of SMSFs need to understand it is their responsibility to be aware of the laws and regulations – ignorance is not an excuse at all. In fact, trustees are dealt with harsher than a normal tax payer. Therefore, an inadequate understanding of the new rules of super can prove costly for retirees.

Incorrect information and your contributions caps.

There are caps on how much you can contribute, (both concessional and non-concessional) - breaching these limits can result in unfavourable tax implications or possibly fines. Common errors include incorrect reporting of personal contributions so when you make a contribution into super, you have the option to either place it as a concessional contribution (pre-tax), or non-concessional (after tax) contribution or a mixture.

You should always be aware of these caps and ensure that you are not breaching them. When you do, the ATO will notify you and what actions you are required to take.

How to correct the information

If you get a notification take the time to work with the ATO and discuss it with them. If you are on the front foot and discuss your issues openly and honestly, you will find them a pleasure to deal with.

Either work with your accountant, the fund in question or directly with the ATO and you can usually amend your return and correct the situation with little or no cost involved. But whatever you do, don’t bury your head in the sand and think it will all go away. If you have mistakenly claimed a deduction or erred in your return, you may apply for an amendment to your income tax assessment.

Don't bury your head in the sand and think it will go away.

Note that you can’t change the contributions made into your super, only how they are handled from a taxation perspective. Once the amendment has been made, the ATO will reassess your excess contributions based on the updated information.

Extra information

It’s important to note that you generally cannot get your super fund to change a contribution type simply to avoid excess contributions tax. So make sure you get this right. If you have an employer making superannuation guarantee contributions, these cannot be stopped if you get too close to your limits.

Super can be a beast to fully understand, but you need to be aware at all times what your limits are when contributing, and what type of contributions you are making.

Get on the front foot if you think something is amiss. Always talk to your fund and/or adviser before you contribute, and the valuable advice could save you a lot of money at the end of the year.

Thanks for reading and feel free to contact me at any time about financial advice or our Investment Trust.

Ray Trevisan is an Authorised Representative (AR:001250963) of Lifestyle Asset Management, who is the holder of an Australian Financial Services License (AFSL:288421). Ray holds a Masters of Management from the University of Technology (Sydney), is a Graduate of the Australian Institute of Company Directors (AICD), NSW Justice of the Peace (JP), an accredited Financial Planner (Dip FinPlng) and member of the Financial Planning Association of Australia (FPA). He has over 40 years of business and investing experience, and operates the northern beaches office of OTG Capital in Newport Beach, NSW.

Click here to send an email to Ray.

I’ve written recently about estate planning and SMSF management as it pertains to “losing one’s marbles”.

This week, I’m focusing on the loss of mental capacity and how it might impact your SMSF. Dementia and strokes are high possibility events according to statistics, and the sadder fact (as I’m a guy), is that women will outlive men by about 5 or so years.

More startling is the research that indicates that upwards of 85% of SMSFs are couples where the man does almost all of the administration and management (including all the decisions), pertaining to that SMSF.

So when you put all these rather sanguine facts together (medical, life expectancy and centralised decision making), it paints a rather concerning picture that suggests planning for “loss of marbles” is not such a silly nor wasted pursuit.

Gleaned from "The Investors Voice "– the monthly Australian Investors Association magazine, Brian Hor has an excellent list of things to consider to protect your SMSF from mental incapacity of one of its trustees.

As always, don't be caught behind the 8 ball (sorry, couldn't help myself with the Dad pun), reach out to a professional if you need assistance, and comprehend that while SMSFs provide for an excellent vehicle to monitor and manage your own retirement savings, an inherent responsibility comes with it at all times, whether or not you are mentally capable or not.

Thanks for reading and feel free to contact me at any time about financial advice or our Investment Trust.

Ray Trevisan is an Authorised Representative (AR:001250963) of Lifestyle Asset Management, who is the holder of an Australian Financial Services License (AFSL:288421). Ray holds a Masters of Management from the University of Technology (Sydney), is a Graduate of the Australian Institute of Company Directors (AICD), NSW Justice of the Peace (JP), an accredited Financial Planner (Dip FinPlng) and member of the Financial Planning Association of Australia (FPA). He has over 40 years of business and investing experience, and operates the northern beaches office of OTG Capital in Newport Beach, NSW.

Click here to send an email to Ray.

Counter-intuitive isn't it!! Being a big fan of Charlie Pickering's The Weeklyon the ABC, it was wonderful to watch Kitty Flanagan have a go at educating our youth about Superannuation.

In case you missed it, here is the link to the segment on YouTube. Kitty's take is obviously topical simply because in comedy and satire, excellent messages are conveyed, and yes - for young people, super is super boring - we get it.

But as the skit goes onto highlight, having no super will have serious consequences, and so ruefully, we won't be heading towards "SuperFLANnuation" where everybody gets everything for free when they hit 75 (you have to watch the video for context - sorry I'm not spoiling it for you), there are some great messages to highlight to your children or grandchildren, especially in the light of the recent FPA week eBooklet on financial education for children (see my blog from 2 weeks ago).

One Super Account

Make sure they only have one super account, and that account has low fees with no life or TPD insurance (unless they absolutely need it). They will come across employers who insist on their selection of fund - advise them they have choice, and to keep their super in one place.

Make Sure Super is Paid

Many young people are too scared to speak out for fear of losing their employment if they're not paid super. It's the LAW, and employers have to pay 9.5% of salary if more than $450 is paid in a calendar month. (there is also a maximum too, and good luck to your kid if they're earning that much!). And let's be totally frank, if their employer is not paying super, it is highly unlikely they're not paying workers compensation or correct insurance - sorry, but simply no job is worth being exploited for and potentially being injured with no recourse - walk out the door!

The Long Game

Work with established, well performing super funds that are delivering for the long term. Super is a marathon, not a race, and the secret in the early years of accumulating your retirement fund is to keep fees to an absolute minimum and have your returns compounding.

Monitor/Grow/Adjust

And just because it is a long game, doesn't mean you should take your eye off the ball. Read your yearly statements, and understand what is in it, and how much you have. This becomes increasingly important as you marry, have children, buy a home etc (and for some - separate/divorce).

Super is a valuable asset today, and will become increasingly important as our population continues to age and our tax base continues to narrow.

I think I can safely say that most people in their 20's are not counting on retiring on the age pension, especially when they see their grand-parents living on that pension. Most believe they can retire happily and financially safe - if so? Start today!

Do you want to retire on a government age pension?

Thanks for reading, and we acknowledge the ownership and content of the ABC, The Weekly and Kitty Flanagan.

Ray Trevisan is an Authorised Representative (AR:001250963) of Lifestyle Asset Management, who is the holder of an Australian Financial Services License (AFSL:288421). Ray holds a Masters of Management from the University of Technology (Sydney), is a Graduate of the Australian Institute of Company Directors (AICD), NSW Justice of the Peace (JP), an accredited Financial Planner (Dip FinPlng) and member of the Financial Planning Association of Australia (FPA). He has over 40 years of business and investing experience, and operates the northern beaches office of OTG Capital in Newport Beach, NSW.

Click here to send an email to Ray.

Having recently attended an AIR meeting in Dee Why, their speaker this time around was from Centrelink, discussing the "granny flat rules" and gifting.

Interestingly, this is now becoming a big thing for the simple reason that many pensioners are facing the prospects of an aged care facility and when confronted with the harsh numbers simply throw their hands up, knowing deep in their hearts they can't afford it.

In last month's Money section of theSunday Herald, George Cochrane answered a good question about granny flats,and in consideration of the increased number of home care places funded by the recent Federal Budget, these are all great considerations when weighing up all the options for retirees, especially if money is tight.

A granny flat interest is an agreement for accommodation for life

In short, the Centrelink information can be found at this link, this is a great read if this option is in your present thinking. Importantly, the term "granny flat" doesn't refer a specific type of dwelling, but an agreement for accommodation for life. And so, the key elements to weigh - this is an agreement to house your parent/s for the remainder of their life.

This often causes me concern as the sibling that takes on this responsibility will gain some financial benefit that is cleared of any participation on the division of the parent's estate after death. What struck me most is this sibling will be the most likely candidate to find their parent either dead, requiring ongoing inhome care or severely injured resulting in hospitalisation (as many retirees fall and die as a result). I keep thinking the emotional strain this must put on the hosting family as the years pass.

My own mother will turn 93 early next year, and on our last visit it is hard enough seeing her so frail - so to live with and around your loved one and the frailty of old age cannot be easy for the sibling living 24/7 in that circumstance.

So within the Centrelink information, granny flat rules determines that the usual "gifting" policy which allows pensioners to contribute $10,000 per year up to a maximum of $30,000 in 5 years, is waived. If a person or a couple transfer the title of their home to someone else, or buy a property in another person's name, or pay to build a flat of addition onto another person's property, and in return, receive a life interest or a life tenancy in that property, which will be the donor's principle residence, then the entire gift is permissible under the granny flat agreement. But with all matters, in the famous words on Paul Keating "the devil is in the detail".

This arrangement requires an agreement to be signed, and a transfer of assets that has to pass a "reasonableness test" together with a deprivation rule. There are complexities involved, including an assets test and deciding principles around aged residents being homeowners or non-homeowners.

As always, talk to a professional, and you'll be surprised in this case, as a Financial Planner - it is not me! Please tell your parents to make an appointment with Financial Investment Service within Department of Human Services to discuss how to best use the granny flat rules, and then maybe consult with a financial planner then if you need to.

You're always welcome to reach and contact me for a preliminary discussion, and I can assist in this rather perplexing area of estate planning. The legislation is well founded to provide some excellent support for parents who are able to take up residence with one of their children.

With a continually aging population and extreme housing prices, this will become an increasingly important consideration for both parents and their children alike.

Thanks for reading.

Ray Trevisan is an Authorised Representative (AR:001250963) of Lifestyle Asset Management, who is the holder of an Australian Financial Services License (AFSL:288421). Ray holds a Masters of Management from the University of Technology (Sydney), is a Graduate of the Australian Institute of Company Directors (AICD), NSW Justice of the Peace (JP), an accredited Financial Planner (Dip FinPlng) and member of the Financial Planning Association of Australia (FPA). He has over 40 years of business and investing experience, and operates the northern beaches office of OTG Capital in Newport Beach, NSW.

Click here to send an email to Ray.

This week's blog is a day late and a little short, apologies for that!

Things have been extra busy with my new OTG Capital Asset Backed Investment Trust finally launching and getting those matters underway. Just click on the logo if you're interested in knowing more

Today, I just wanted to get the good news out about the Australian Investors Association Northern Beaches Discussion Group is back on and will be a regular fixture on the last Friday of the month at Collaroy. Details can be found in the Events section of the AIA website at www.investors.asn.au.

We'll be going over the excellent Bitcoin/Cryptocurrency presentation recently done by Dr Mark Staples from the CSIRO on this ground breaking new technology and what it will mean for investors and financial services in general.

I’m pleased everyone read the memo in regard to the DY RSL and our association with the AIR meeting having now finished. I stopped by on at the AIR’s monthly meeting at DY RSL to make sure nobody had turned up just in case. Again, my many thanks to the AIR for the kindness and generosity of spirit allowing the AIA Group to share their DY arrangement while we organised a new venue.

Hope to see you at the Collaroy Swim Club Community Centre from 1.30pm tomorrow - 31 August 2018.

Thanks for reading.

Ray Trevisan is an Authorised Representative (AR:001250963) of Lifestyle Asset Management, who is the holder of an Australian Financial Services License (AFSL:288421). Ray holds a Masters of Management from the University of Technology (Sydney), is a Graduate of the Australian Institute of Company Directors (AICD), NSW Justice of the Peace (JP), an accredited Financial Planner (Dip FinPlng) and member of the Financial Planning Association of Australia (FPA). He has over 40 years of business and investing experience, and operates the northern beaches office of OTG Capital in Newport Beach, NSW.

Click here to send an email to Ray.

As a member of the Financial Planning Association of Australia*, I’m privy to some excellent information that is sent via email on a regular basis (yes, I know! My Inbox is always full of reading material just like yours!!).

With this week being the Financial Planning Week in Australia, (bet you didn’t know that did you!!), the FPA have sent out an excellent eBook that is free to download from their website, and its all about raising children and their relationship with money.

Given I have 3 children of my own, my wife and I have always striven to educate our kids about money, credit cards, financial matters including contracts (both for buying stuff and being employed), and so this topic is very near and dear to my heart. The lessons taught in youth are hopefully carried through to adult life strongly.

Today I’m going to expand on some of the key messages surrounding older children and some of the excellent tips provided in the FPA’s publication.

Part time work

Encourage your kids to get a part time job, any job. Mine have delivered papers in the local area, child minding/babysitting, tutoring, barista/café work etc. This builds a work ethic as well as correlating value of money to effort.

Contribution at Home

We’ve chosen not to charge our children board – many reasons really including our objection to how much our children have to pay for their education given we got ours for free (but I’ll try not to divulge into partisan politics now!). In recognition of this, we simply expect our children to positively contribute to the running of the house including set weekly chores, and maintaining a cleanliness of their own space that respects the family and all that live under the same roof.

Eschew Credit

We strongly prefer that our kids learn to save and then buy. I’ve banged on relentlessly that it costs $25 of savings to pay for $1 of debt in my previous blogs – the lessons at these formative years are very important. And try to have them stay away from AfterPay type offerings. Layby is fine because you don't get the product immediately. In today’s age of instant gratification, teaching children to wait for things is necessary and staves off impulse buying decisions.

Savings

Tied strongly to using credit, encourage your kids to put money away for something big like an overseas trip, car, a super-duper gaming computer etc., this helps build a sense of responsibility and achievement when the savings goal is achieved and the pot of gold is enjoyed.

Mistakes

“I’ve made a few”, and so they must be allowed to do so as well. Recently, in allowing one of our children to have a debit card, we learned just like they did about online spending behaviour and the very additive nature of some retail/online offerings. Tying these mistakes back to “number of hours serving coffee” or “number of papers delivered” to correlate the wasted funds is an excellent way of attributing value to their spending habits. And experience is also a great teacher.

if you fail to plan, then you will plan to fail

In summation, please download this eBookand enjoy the wonderful lessons it provides to children of all ages and parents alike. It’s a quick read that you can knock over in about 15 minutes, but the tips and lessons are invaluable. And just as I advise adults in financial education, my final message is no different for you and your children, if you fail to plan, then you will plan to fail. Help them pull together a financial plan.

Thanks for reading, and I hope you enjoyed the eBook as much as I did.

*Acknowledge the FPA for their eBook and photographs lifted from their publication.

Ray Trevisan is an Authorised Representative (AR:001250963) of Lifestyle Asset Management, who is the holder of an Australian Financial Services License (AFSL:288421). Ray holds a Masters of Management from the University of Technology (Sydney), is a Graduate of the Australian Institute of Company Directors (AICD), NSW Justice of the Peace (JP), an accredited Financial Planner (Dip FinPlng) and member of the Financial Planning Association of Australia (FPA). He has over 40 years of business and investing experience, and operates the northern beaches office of OTG Capital in Newport Beach, NSW.

Click here to send an email to Ray.

As a member of the AIA, I'm privy to some wonderful resources including other investors educating investors, the credo of our crew. This week I wanted to share a great article from Dr Shane Oliver- I hope you enjoy it as much as I did reading it.

In the current climate of immediate information, the investing arena is filled with dramatic news especially aided and abetted by a rampant tweeting US president. What is important? What isn't?

Shane discusses "Mr Market" - which I equate to sentiment - no matter how well a company is performing, it can still be dragged down by sentiment. I've often read that only 20% of the value of a company is attributable to its own actions - wow! Mr Market is very powerful indeed if that is true.

With that in mind, 9 tips are here to educate:

1. I've written on this before, and this continues on the theme of the ''long game". Keep investments compounding and watch the results.

2. Be Aware of the Cycle. This is also about market sentiment, when the market is buoyant, most shares will be, and vice versa. Each asset class also has different cycles, so invest within the respective cycles accordingly.

3. Invest for the Long Term. Most investors are bad at it, and Shane's article makes a point of "winning by not losing". Sort of a double negative, but it is sound advice for novices (which most of us are!). So get a long term plan in place that suits you, your risk profile/tolerance and age - and stick to it!

4. Diversify. Self explanatory right? So why do I keep meeting local investors that have the 4 banks, Coles, Wesfarmers, Telstra & BHP, and tell me they're diversified?? Critically look at what you're doing and understand the risks associated with your plan in relation to being a "one trick pony".

5. Turn Down the Noise. I love this tip!! With so much information out there (including my blog!!), sometimes it helps to turn it off. With tip 3 in mind, keep reading, but within the context of the long game, short term blips, including tweets from POTUS, are not always important to your plan.

6. Buy low, sell high. I actually HATE this tip. It always sounds so darn easy doesn't it?? Well I've hardly ever got that call right!! And when I look back at when I have, I honestly have to blame dumb luck rather than an intellectual insight or cleverness on my part. So yes, good tip, and good luck trying to make it work.

7. Beware the crowd at extremes. This is similar to Warren Buffet's call of buying when everyone is selling and vice versa. Jumping on the wagon is not always a good play, as it may be heading over a cliff - again, long time frame investors don't fall for these events. This associated graphs demonstrates quite nicely.

8. Investment in sustainable cash flows. You aren't ignorant to the day to day machinations of companies, governments and global goings on. Investing in the most popular mobile phone maker or most widely used internet search engine simply makes sense because they make lots of cash. Adopt a common sense approach to evaluating investments and follow the money.

9. Seek Advice. Shane's words, not mine!! Couldn't agree more, but then again, you'll expect me to say that as a financial planner and the manager of an investment Trust!!

But seriously, if you're not sure, phone, email, subscribe or join investment communities of interest and educate yourself. You don't have to engage a financial planner per se, there is SO much information available on the internet and about in society - you have NO excuse to say "I didn't know!"

Thanks for reading, and I hope you enjoyed these tips as much as I did.

Ray Trevisan is an Authorised Representative (AR:001250963) of Lifestyle Asset Management, who is the holder of an Australian Financial Services License (AFSL:288421). Ray holds a Masters of Management from the University of Technology (Sydney), is a Graduate of the Australian Institute of Company Directors (AICD), NSW Justice of the Peace (JP), an accredited Financial Planner (Dip FinPlng) and member of the Financial Planning Association of Australia (FPA). He has over 40 years of business and investing experience, and operates the northern beaches office of OTG Capital in Newport Beach, NSW.

Click here to send an email to Ray.

During the AIA conference last week, I had the opportunity to sit through an entertaining yet sobering presentation from a lawyer specialising in estate planning. Having watched this same presenter 2 years prior, I was interested to see if there were any pertinent updates or new approaches to an age old problem (yes I know, lousy pun/dad joke).

Not really, but still a fascinating look into some the scarier aspects of growing old. In parallel to this, I also bumped into my old boss from my Telstra days (I haven’t always been in finance or financial planning – IT/Telco for over 35 years beforehand). He’d lost his wife many years back and had settled with a new partner for over 15 years.

In a similar vein, it was refreshing to hear that he had rationalised his estate planning with his partner (defacto by law), and the division of assets between himself, his partner, their respective children from their previous spouses (both dead now), and their respective grandchildren (phew!). And if you think this is unusual, think again.

The statistics will tell us that over 50% of us will divorce and remarry. The notion of a blended family, money/estate issues, and how to handle aging parents is a real and present danger.

Danger?

You bet. When you add in the mix the likelihood that many of us as we age will also contract Alzheimer’s or a similarly destructive motor degenerative disease, the importance of a valid and well thought through Will and EPoA (enduring power of attorney) cannot be overstated. Our good lawyer presenter outlined how the traditional husband/wife mutual EPoA will no longer suffice.

The loosing of one’s marbles isn’t a rare thing, and the potential for a couple being split for health reasons is high. The additional potential for the remaining spouse to be of diminished mental faculties together with aged care repatriation is also not unheard of. If that is the case – does the EPoA cater if it has been drafted with a simple husband/wife swap? In many cases – no.

And to that end, this presenter while providing a light-hearted approach to the topic, pointed out the need for families to come together as best as possible, and discuss openly and honestly, the topics of inheritance, diminished mental faculties, aged care vs carers in the home, and exactly who gets what should a death occur, marbles are lost, or combinations thereof. To add some spice to the situation, add blended families, LGBTQI relationships, large age gap relationships (gold diggers as was mentioned), unheard of children from past “stray” relationships, and you’re off to the races.

While our lawyer friend was sanguine about his fee’s horizon, my wife & I felt very honestly that he was saying very clearly, he gained NO pleasure from the increased fees these situations presented – his was a poignant warning – plan now while all the marbles are in place, and the conversations can be held in the true spirit of family.

His other suggestion was to write everything down, and from my own IT background now, with video smartphones and HD tech available, I would also suggest having voice/video recordings of the meetings, and the agreements made during all of the discussions. The clarity now, will save litres of tears being split later when the marbles roll down the aisle and bodies are buried/cremated.

Don’t forget, we have excellent connections in the legal field that specialise in estate planning, I’m happy to put in contact with them, and again, thanks for reading.

Thanks for reading, and I hope you enjoyed these tips as much as I did.

Ray Trevisan is an Authorised Representative (AR:001250963) of Lifestyle Asset Management, who is the holder of an Australian Financial Services License (AFSL:288421). Ray holds a Masters of Management from the University of Technology (Sydney), is a Graduate of the Australian Institute of Company Directors (AICD), NSW Justice of the Peace (JP), an accredited Financial Planner (Dip FinPlng) and member of the Financial Planning Association of Australia (FPA). He has over 40 years of business and investing experience, and operates the northern beaches office of OTG Capital in Newport Beach, NSW.

Click here to send an email to Ray.

After a few false starts last year, the OTG Capital Investment Fund is finally launched!

With great fanfare, and a small celebration, accompanied by my wife last weekend, we participated in the annual Australian Investors Association National Conference where, as a Bronze sponsor, we attended a small booth, and provided information and discussions with interested investors and commentators alike.

Much of the discussion in the lead up stages has been around the naming of a Fund that deals in mortgages but is not a mortgage fund. The confusion can be amusing at times. Mortgage funds have had a bad rap (and rightly so after the GFC 10 years ago) because valuations left far too many investors short changed, and even worse, unable to access even their reduced holdings because of frozen accounts (ie. lack of liquidity).

Put simply, our Fund is all about commercial loans and providing funds to highly respected, reputable second tier lenders. In relation to a standard risk / reward yield curve these kinds of Funds are usually very safe and recommended for conservative to balanced investor types.

Simplicity

Ours is a simple fund, many who have previously invested in this asset class need to weigh into evaluating loans, whether it is collateralised or not, maturity dates and transfer of funds to the lender when required. OTG Capital’s Fund takes care of all that on behalf of our investors as the Fund Manager. We’ve had over 17 years of experience in this field and have now expanded out to offer this Fund to our clients in this offering.

Safety

Many commercial loans in the market place today are provided without security (that is collateral) and while it is very popular, we’re not involved in this type of lending at all. There are many businesses out there ready and willing to take loans, but the real trick is getting the money back in (see my last week’s blog specifically).

Regular Income

We provide an excellent investment vehicle for those looking for regular, stable income that has little to no maintenance like checking stocks or bonds. We also provide a reinvestment facility if you’re looking to accumulate wealth as well.

Diversification

We never expect anyone to place all their cash reserves in one place, so having a Fund like OTG Capital’s is an excellent opportunity to expand and diversify an investor’s or SMSFs portfolio.

So if you weren’t at this year’s annual conference, never mind, we hope to see you there possibly next year, and if you’re interested, please reach out and contact me for more details about the Fund. We’ll provide regular updates on our blogs and out to our email list in the coming quarters.

the real trick is getting all the money back

Thanks for reading.

Ray Trevisan is an Authorised Representative (AR:001250963) of Lifestyle Asset Management, who is the holder of an Australian Financial Services License (AFSL:288421). Ray holds a Masters of Management from the University of Technology (Sydney), is a Graduate of the Australian Institute of Company Directors (AICD), NSW Justice of the Peace (JP), an accredited Financial Planner (Dip FinPlng) and member of the Financial Planning Association of Australia (FPA). He has over 40 years of business and investing experience, and operates the northern beaches office of OTG Capital in Newport Beach, NSW.

Click here to send an email to Ray.

As OTG Capital ramps up to launch date at the end of this month for our own Asset Backed Fund, business news outlets are printing incredibly timely pieces on the market trends that surround second tier lending. Now I’m not talking about payday lenders like Nimble or retail pay solutions like AfterPay, I’m discussing multi-million dollar investing into major and medium level property projects.

So why is this happening? The banking RC has highlighted the industry’s lending practices and as a result, the major finance institutions have all but shut up their loan book. Finance approval times have ballooned from what was days to weeks, and as a result, the lack of buyers at residential auctions has dried up, particularly compared to the market just 12 months ago. There are plenty of buyers, but simply no finance.

Property developers who have depended on banks and overseas competitors to provide lines of credit to enable their major projects are suddenly in a finance drought. With assets waiting for development, the squeeze is on – without finance, their property acquisitions can’t be developed, and the projects don’t come on line, then the ability to turn projects into cash also dries up.

In this market climate, developers have no choice, they aren’t able to sit on their pieces of dirt and wait the banks out, those blocks of land simply burn holes in their company bottom line – so they are increasing turning to “second tier” lending.

Many investors that I come across in my travels have not heard of this marketplace, yet second tier lending has been around since Adam was in short pants. And if you don’t have the need to go to this market (which is the vast majority of the Australia population), then stories like that on the front page of the SMH weekend Business Section won’t even make much sense to you.

This market is funded and dominated by money pouring in from high net worth individuals looking for higher returns rather than leaving their funds in fixed term bank deposits (which are only government guaranteed to $250k anyways). This money is in turn, loaned out for major development projects, and depending on the urgency, timeframe and squeeze the developer may be in, will pay investors high single digit to medium to high double digit returns.

with higher return comes higher risk

Easy money right? Not so fast, and theweekend piece is at pains to explain – while the returns are attractive – how many times have I said in my blog!! With higher return comes higher risk.

Savvy investors in this space should always be aware, even when your instinct tells you it is a no-brainer. If you are inclined to invest cash in this way, and you’re not sure, take time to read the article in full (don’t skim it), and be armed with strong knowledge.

The OTG Capital fund will be investing in similar styles of commercial B2B loans that provide reasonably moderate returns that have a leaning to conservative valuations and conservative loan ratios, as well as a bias to the long term, well known clients that have solid track records in actually paying their loans back!

For all the offerings out there presently, please always remember, there will always be an abundance of people willing to borrow money and those who will lend it with gay abandon – the real trick to this asset class of investment is keying into the funds that are good at bringing all the money back in, as well as the periodic interest cheques.

the real trick is getting all the money back

If you’re not sure about this type of investing, be sure to reach out and let’s have a chat.

Thanks for reading, and please reach out anytime.

Ray Trevisan is an Authorised Representative (AR:001250963) of Lifestyle Asset Management, who is the holder of an Australian Financial Services License (AFSL:288421). Ray holds a Masters of Management from the University of Technology (Sydney), is a Graduate of the Australian Institute of Company Directors (AICD), NSW Justice of the Peace (JP), an accredited Financial Planner (Dip FinPlng) and member of the Financial Planning Association of Australia (FPA). He has over 40 years of business and investing experience, and operates the northern beaches office of OTG Capital in Newport Beach, NSW.

Click here to send an email to Ray.

As we close in on the end of the month, I’ll be heading north shortly to the Australian Investors Association national conference to launch our company’s mortgage fund. I’ll be providing updates as I go.

In recent presentations, I’ve asked investors and members of my local discussion group about ethics and the dilemmas of investing responsibly. This came about through my research in B2B lending/borrowing, and the flourishing fintech lending markets together with the adrenaline charged payday lending / retail shopping apps like Afterpay and Zipmoney. Are we comfortable profiting from other people’s financial misery? For example; debt junkies that can’t seem to pay back their loans, or Prospa whose IPO documents portrayed a commercial lending environment where the average business loan is 41.6%pa!!

To my surprise my audience was evenly split – half were comfortable making the money, the other half simply rationalised this as human behaviour that is inevitable, so why not profit from it? I was a bit surprised, but do understand (not always agree though!)

John Collett explores this subject in a neat piece in Sunday’s Money Section just past, and the dilemma of achieving robust returns, while still trying to do the right thing. The article highlights the top 10 super funds that have specifically designated “sustainable balanced funds” so investors can place their money with comfort knowing their funds are doing good – and the returns, while still less than the overall market, is steadily starting to gain, and is forecast to overtake in the near future.

But what is ethical? I guess it really is in the eye of the investor. Here’s my list that I won’t go near and the industries include;

TobaccoDefence/armamentsFossil fuels / human rights abuseGambling (in all forms)Payday lending/out of control fintech

By the way, the top three in this list were at the top of most popular exclusions mentioned in Collett’s article.

make sure your money is not only working hard for you, but also for your social and moral principles.

Additionally, many funds now also adapt a governance model to implement their ethical investing strategies which include positive and negative screening to highlight/omit specific industries, broad criteria which apply to environmental, social and governmental criteria, and lastly impact investing which targets specific social or environmental issues while also making money.

In the end, we must all decide how to sleep well at night, and what are our priorities now and in the future. The old argument that ethical investing doesn’t pay is certainly today considered a myth, and there is sufficient empirical data to support a “green” or eco friendly portfolio can do exceptionally well, especially in the booming renewables arena. Many IT companies could potentially fall into these categories as well.

If you’re not sure what your Super fund is investing in, well check out their website – you’ll find a full list of what they do and don’t invest in, and rather than tick a simple box, if ethical investing is important to you, then delve a little deeper and make sure your money is not only working hard for you, but also for your social and moral principles.

Thanks for reading, and please reach out anytime.

Ray Trevisan is an Authorised Representative (AR:001250963) of Lifestyle Asset Management, who is the holder of an Australian Financial Services License (AFSL:288421). Ray holds a Masters of Management from the University of Technology (Sydney), is a Graduate of the Australian Institute of Company Directors (AICD), NSW Justice of the Peace (JP), an accredited Financial Planner (Dip FinPlng) and member of the Financial Planning Association of Australia (FPA). He has over 40 years of business and investing experience, and operates the northern beaches office of OTG Capital in Newport Beach, NSW.

Click here to send an email to Ray.

It is with great concern that I’m writing today’s blog after having read that as a nation, Australia is now carrying $45B (almost $2000 per person) in credit card related fees and debt. John Collett’s piece is a continuing reminder that we are spending expensive money and not truly understanding the impact of doing so.

I’ve written previously on this and the numbers don’t lie –it takes $25 of savings to compensate for $1 of debt!!! If this figure alone doesn’t scare you, I’m not sure what can. Credit cards are loved by the banks, and they love to give them out. The figures indicate the banks made $1.5B in fees and late payments.

it takes $25 of savings to compensate for $1 of debt

Now I will not disavow the use of credit cards – why? Because I believe they are a great product! I’ve had a credit card in various forms since I was 18 (remember Bankcard??), but in all that time, I’ve only ever paid interest on my card once – yes once! My wife & I got married on our Mastercard and couldn’t pay the entire amount off in the first go, so we staged them over 3 months. But believe me, at 24% interest, I fully understood what was going on.

I'm gobsmacked when talking to people who have a mortgage offset account with available funds, yet still pay interest on their credit cards! It makes no sense. My father used to have this great saying, look after the cents and the dollars take care of themselves.

look after the cents and the dollars take care of themselves.

Credit card debt is no different. Yet here we are, according to June 2017 figures, here’s the current situation (with thanks to SMH/John Collett for the graphic):

Transfer Cards have been a thing for a while now, used to lure a credit card user from one bank to another bank's card – along with an interest free holiday. Recently the banks wised up to that and now charge an average of 2.5% (which is far better than 23% or at the lower range 14%) - but if you need to get off a credit card binge, these cards can help – but they can also make things a lot worse too.

A number of years ago, my wife and I assisted a close family member with their credit card troubles and worked with them to consolidate their debt, and with the use of a credit union personal loan and a transfer credit card deal with interest free for 2 years, we reduced their overall interest on $45,000 of credit card debt from 24% down to about 12% over that 2 years. Saved thousands in interest payments and got the “monkey off their back”. While doing so, I learned a lot by taking the time to read the Terms and Conditions of the Transfer Card offer.

In one word – OUCH!!! Upon reading the fine print, I promptly cut the card into pieces and didn’t allow my family member near it. The balance was paid off, and then closed.

If the card had been used, then the purchases attracted 24% interest immediately (no interest free period), and the sting in the tail? Well when paying off the debt, the highest debt remained outstanding, you didn’t get to choose which money was paid off – so the debt would ultimately hang in longer and longer with the most expensive money being paid last. So, to an undisciplined saver/debt junkie – the Transfer Card was/is potentially just another debt trap.

credit cards are good financial tools to use, BUT only if you pay them in FULL every month

I can’t stress enough, credit cards are good financial tools to use, BUT only if you pay them in FULL every month. If you don’t they will instantly become your worst enemy. And in providing any kind of ongoing financial advice and education – to anyone struggling with debt and savings – the credit card is the very first casualty – IT HAS TO GO!!

As part of my financial planning practice, over the past 2 years since I commenced operations I have assisted a number of clients’ pro bono to simply help them budget and save. There is no point in providing financial advice to clients that don’t have money!! I’m not interested in plunging my clients into more crippling debt.

If you’re struggling or need assistance, there are plenty of excellent community and government services to get you through, and I’m happy to assist you too. But rolling over your debt into more credit cards or sinking your head in the sand is NOT the answer. Face up to your finances and get rid of your high interest debt as quickly as you.

Thanks for reading, and please reach out anytime.

Ray Trevisan is an Authorised Representative (AR:001250963) of Lifestyle Asset Management, who is the holder of an Australian Financial Services License (AFSL:288421). Ray holds a Masters of Management from the University of Technology (Sydney), is a Graduate of the Australian Institute of Company Directors (AICD), NSW Justice of the Peace (JP), an accredited Financial Planner (Dip FinPlng) and member of the Financial Planning Association of Australia (FPA). He has over 40 years of business and investing experience, and operates the northern beaches office of OTG Capital in Newport Beach, NSW.

Click here to send an email to Ray.

I’ve written previously of deals that are too good to be true, and caveat emptor – “let the buyer beware”. But the lack of care bordering on dereliction of duty when it comes to investors and their approach to share dividends, imputation credits and the like makes me shiver with caution and fright. Don't get me wrong - I'm not against investing in this asset class at all! I'm simply saying to do so to the detriment of all other classes is not a great investment strategy.

No more is this highlighted than in today’s SMH article on share dividends and the dangers inherent in the ASX today. Noel Whittaker, one of my favourite finance authors out there waxes lyrical today on the dangers surrounding shares whose dividends are too high in comparison to their book value. I feel certain in the next 6-12 months, we might be hearing “I told you so”.

The difficulty is far too many superannuants and retirees look to the top 10 ASX companies primarily for income and capital and fail to diversify as a result.

When challenged they are putting all their eggs in one basket, the response is mute – punch drunk on the growth, income and imputation cheques arriving in the mail – not unlike State Governments and their addiction to gambling taxes from poker machines and casinos.

Unfortunately, the damage is happening, they just don’t know it. Noel explains that the Banking RC has diluted the growth factor of many of the bank stocks, but one has to question when dividends are climbing to near double digit rates, nobody is asking “why”, and is this sustainable??

I strongly recommend to those of you that are single minded in your pursuit of these gains to thoroughly review your share portfolio and simply check that the returns seem reasonable and sustainable.

Far too many I’m chatting too are sitting there nursing a sore pocket because of the drop in Telstra’s share price – the signs were all there to be read in their forward projections, and their dividends didn’t make sense, and only now are being cut back.

"If [the dividend yield] looks too good, it probably is," says Peter Warnes, the head of equities research at Morningstar Financial.

Couldn’t have put it better myself.

Please check out Noel’s article by clicking this link – within it he also points out some excellent information about the banks, Telstra and some commentator’s picks if this is still your preferred way to invest your hard earned money.

I’ve also appended the two graphs highlighting the top ten stocks for dividends, and more importantly their recent capital growth performance – which one do you think you should be paying attention to more????

(HINT – its most likely not the dividend).

So all of you that SMSFs out there, given its time to pull together your end of FY report and books of account for audit, this is also a great time to be reviewing your investment strategy and asking yourself honestly if your portfolio is truly diversified, or are you overly relying on the dividend imputation tax loop hole? There is more than one asset class of investments that provide equally good returns with far less maintenance and far less risk.

Need I say far too many people relied on the Dick Smith name when they took a bath on that stock – delve deeper – please. And if you’re not inclined to do so, then maybe consider some less risky investments classes on the asset/risk curve and life a happier, stress free life.

Thanks for reading, and please reach out anytime.

Ray Trevisan is an Authorised Representative (AR:001250963) of Lifestyle Asset Management, who is the holder of an Australian Financial Services License (AFSL:288421). Ray holds a Masters of Management from the University of Technology (Sydney), is a Graduate of the Australian Institute of Company Directors (AICD), NSW Justice of the Peace (JP), an accredited Financial Planner (Dip FinPlng) and member of the Financial Planning Association of Australia (FPA). He has over 40 years of business and investing experience, and operates the northern beaches office of OTG Capital in Newport Beach, NSW.

Click here to send an email to Ray.

Continuing the theme from last week’s blog and great response I received from the issue and comments, its worth further investigation and in talking about this, it would appear I’m not alone. Noel Whittaker is on my weekly reading list and his piece on “closing the gap on women’s super” is a great follow up to our #$MeToo blog from last week.

For those of you who are married out there, check out your respective super balances – (I’m not blameless here either by the way). My wife and I have run our own SMSF since 2001, but we decided for her to stay at home to raise our 3 children – yes we could’ve made a lot more money, but we don’t regret it one moment on many angles, and just about all them have nothing to do with money or lifestyle. Our current super balance indicates my wife’s super is approximately 1/3 the value of mine. So we have some work to do in redressing this imbalance. Some of the ways to do this are outlined below.

But for women (and their partners), there are some startling statistics from Noel’s article worthy of a long think and discussion:

Women will outlive men in Australia by at least 5 yearsThere is presently a 16% pay gap, and while narrowing from years past, this gap will still be there for many years to comeWomen’s investments earn less because they tend to be more conservativeThe majority of the responsibility for child rearing still remains with women, and therefore women's lifetime income suffers as a result.

The conservative investing stat was an interesting point, and Noel's article highlights an example (similar to the industry funds TV ads), where 2 people start work at 20 with $35k pa and assume 4% wage growth and 9.5% super. One invests conservatively at 4% while the other invests at “more growth oriented” allocations. The differences are startling – the end result at 65 is $750k vs $2m!!

Last month’s Federal budget has made a good start on redressing the imbalance in super between genders, which includes

balances below $6k being managed by the ATO from now on, and being proactively data matched to be reunited with their rightful owners.Tax deductibility of super contributionsCatch up contributions for those temporarily out of the work force (child rearing), andSpouse contributions

So much of what needs to happen now is education, (as well as equality in pay) – so for my female readers, this is not only for you, but for your friends out there as well who need assistance and knowledge. There is plenty of great information out there including the ATO, MoneySmart, Australian Investors Association and many, many others. So don’t hesitate to ask any of them for help or email me.

I also have to admit in Noel’s example I had a wry smile that any 20 year old out there today would be thrilled to have a $35k job with 4% pa wage growth. Most Australian workers haven’t seen this kind of wage growth for the past 5 or more years, and the signs on the horizon aren’t encouraging. "Jobson Growthe" is a dream for only a few I’d suggest.

Key take away? Save what you can into super, and enjoy what you have as well I’d suggest. And if you believe one day that big businesses or small alike will provide you a wonderful wage and all your super paid on time as it should, without being forced to do so through regulations and an award wage system – well flying bacon is also an option for you to consider as well.

OTG Capital will be in a position to launch its Sub-Fund residential mortgage backed security very shortly – more on that in our blog soon.

Thanks for reading, and please reach out anytime.

Ray Trevisan is an Authorised Representative (AR:001250963) of Lifestyle Asset Management, who is the holder of an Australian Financial Services License (AFSL:288421). Ray holds a Masters of Management from the University of Technology (Sydney), is a Graduate of the Australian Institute of Company Directors (AICD), NSW Justice of the Peace (JP), an accredited Financial Planner (Dip FinPlng) and member of the Financial Planning Association of Australia (FPA). He has over 40 years of business and investing experience, and operates the northern beaches office of OTG Capital in Newport Beach, NSW.

Click here to send an email to Ray.

Much has been written of late in relation to the #MeToo movement and the push for more equality for women. This week’s blog picks up on this theme as a result of the women in my life who have a daily influence on me, and Georgina Dent’s timely article in last weekend’s Money Section of the SMH.

The article sights some fascinating data from a recent UBS investment bank survey that by life’s end, at least 8 out of 10 women will be solely responsible for their financial future. This statistic sounds right simply because we know at least 50% of marriages fail, and women outlive men by at least 5-6 years. 80% possibly sounds light in fact! (well it is a US based study).

8 out of 10 women will be solely responsible for their financial future at some point in their life

What’s puzzling though is the same research depicts even the modern millennial woman defers financial decisions to their man (60% in fact). So when the proverbial hits the fan and divorce or premature death visits a couple, 56% of them discover hidden accounts, unknown spending habits, undisclosed debt or out of date wills that cause more than the occasional headache and likely costs them a lot of cash.

Traditional gender roles still play a huge influence with 71% of married women wanting their men to provide financial security, and 87% of men expecting to deliver it – the corollary is strong then that the decision making in a couple then defers to the man in the relationship.

Tradition also plays a strong part in the assumption that men know more about money than women, and women don’t have the confidence to invest or manage their money well. The facts belie these myths.

Industry pundits specialising in financial advice to women don’t necessarily advocate revolt or overthrow in a couple’s money management regime – but asking simple questions and being more involved in the day-to-day transactions vastly assists women in understanding where the money is coming from and where its going. And women should certainly not abdicate knowledge of what’s going on – that’s a mistake they’ll rue later on in spades.

What's not OK? Is for you, as their spouse, having no clue where the money is going.

So for women out there, ask the questions, and be knowledgeable about your joint financial future and get involved in the planning and management of your money and net worth. Men share the load with your partner.

As Georgina finishes her article, I wholeheartedly agree: “Financial security is not the exclusive domain or responsibility of either men or women and pretending that it is, ultimately, does no one any favours."

Thanks for reading, and please reach out anytime.

Ray Trevisan is an Authorised Representative (AR:001250963) of Lifestyle Asset Management, who is the holder of an Australian Financial Services License (AFSL:288421). Ray holds a Masters of Management from the University of Technology (Sydney), is a Graduate of the Australian Institute of Company Directors (AICD), NSW Justice of the Peace (JP), an accredited Financial Planner (Dip FinPlng) and member of the Financial Planning Association of Australia (FPA). He has over 40 years of business and investing experience, and operates the northern beaches office of OTG Capital in Newport Beach, NSW.

Click here to send an email to Ray.

Great piece in yesterday’s SMH Money section (you’ll notice a trend here for my favourite readings!) on mortgages and how to get the best ones.

Nicole Pedersen-McKinnon is a financial educator who delivers Smart Money Start in high schools around Australia and her article on how to DIY a good mortgage is well worth a few minutes of your time if you’re in the market for a home loan.

I’ve written previously about the banking RC and the biggest issue many face today is the “best interest” rule, which the current government took out of the FOFA reforms – (I still can’t understand why!!!). And enough has been written and reiterated that the industry is presently not looking after its most important asset – the customer.

So in picking up on Nicole’s best points, how can you bypass a mortgage broker and get the best loan? Three tips to consider:

Compare apples with apples

Common sense dictates don’t look where you can’t succeed. If you have 20 per cent deposit, commence your search with 80 per cent loans. These will also be cheaper because you won’t be paying extortionate lenders’ mortgage insurance – please remember this insurance doesn’t cover you, it covers the lender!!

Most mortgage comparison sites will do this for you automatically which allows you to be your own broker. But read the fine print, not just the headline interest rate! Fees and charges could push the real interest rate far higher.

Always ask if the institution can give you a discount from the advertised rate too – you’d be surprised how many do but beware of low introductory rates as after this "honeymoon" period the loan could really cost you later.

With your shortlist ready now start working through each offer’s Key Facts Sheet, which will lay out all the costs, fees, conditions etc. Lay them all out on spreadsheet so the comparison can be done easily.

Its not only the price

You have to consider value rather than price. Any loan that doesn’t let you make extra repayments should be ditched immediately, no matter how cheap they seem. This is not a 3 year deal, you may end up having this mortgage for over 20 years or more.

Give yourself flexibility by going for a long period, say 30 years because you want the ability to reduce or increase repayments depending on your situation.

The offset loan

Offset accounts are an Australian innovation from the 1990s that has spread around the world. You simply operate one account from which monthly interest payments are made, and you draw all your expenses, and income into the same account. You therefore only pay interest on the net amount, “offsetting” interest from your sources of income as you go along.

Having had an offset mortgage myself since 1996, I’ve operated this “line of credit” ever since. And the flexibility is fabulous as it allows my expenditure to go up & down, pay my credit cards on time, every time (I have paid credit card interest only once in my life!), and my monthly pay goes into the mortgage to save even more interest.

In Summary

Home loan mortgages are the cheapest money available in Australia - anyone buying a home would be silly to consider any other option in my opinion, but there is one catch – you aren’t able to fix interest rates with offset accounts. Then again, this provides another set of market variables that loads unnecessary risk in buying a house at historically low interest rates as they are today, and maybe that's for another blog on another day.

And to finish on Nicole’s final note: don’t even think about making a home loan interest-only, which many brokers will advise in order to keep their trailing commissions high. You want this house to ultimately be yours don’t you???

.

Thanks for reading, and please reach out anytime.

Ray Trevisan is an Authorised Representative (AR:001250963) of Lifestyle Asset Management, who is the holder of an Australian Financial Services License (AFSL:288421). Ray holds a Masters of Management from the University of Technology (Sydney), is a Graduate of the Australian Institute of Company Directors (AICD), NSW Justice of the Peace (JP), an accredited Financial Planner (Dip FinPlng) and member of the Financial Planning Association of Australia (FPA). He has over 40 years of business and investing experience, and operates the northern beaches office of OTG Capital in Newport Beach, NSW.

Click here to send an email to Ray.

Timely article in the SMH today about planning for the end of financial year. This doesn’t just apply to business by the way!

Some important rules about super contributions and timing your deposits – don’t leave it until the last moment. The date on which the funds are received is important, not the day that you sent it!!

Let’s take a quick look, and as always – if you’re not sure, please reach out to an industry professional or a certified tax agent.

Charities

If you’re generous, make sure you send off your donations now, and keep a record for anything over $2. Keep in mind, it doesn’t always have to be cash. The ATO website details a number of instances where gifts can qualify as well – check out this link.

Delay Income

Nice for some right!! If you find you’re making too much in this financial year, call up your income source to see if they’re able to delay paying you until after 1 July.

Bring Forward Capital Losses

Remembering that you need to have capital gains to offset capital losses, you may find bringing them forward will reduce your tax liability or even provide a refund.

Super

Have you made your full tilt towards super? Remember the rules changed last year, and you’re only allowed $25k in concessional contributions (that is before tax money), and $100k in non-concessional contributions per annum (that is after tax money). The rules surrounding bring forward sum, and hang overs can be complex so reach out if you’re not sure. Extra contributions will have the impact of reducing your taxable income while also boosting your retirement fund (win-win!).

Bring forward Expenses

If you have tax deductible expenses, try to bring them forward, and for those operating small businesses, remember your $20k instant write off allowance. Many have mistaken this as a “gift” from the ATO – is kind of is, but its not a grant as I’ve heard some say. This ruling simply allows you to write off up to $20k in expenditure without having to factor in depreciation over many years. Simpler paperwork, and an immediate deduction – everyone wins really (including the ATO in reduced administration I’d suggest!).

Pay Interest

If you’re able to do this in advance, and bring this deduction into the current FY to reduce your tax, all the better.

So don’t wait until the last moment, get planning now, and particularly for superannuation, send off contributions sooner than later because they will all be slammed trying to get their books done in time for the EoFY.

Now all we have to do is put up with the awful EoFYs TV commercials (ugh!).

Thanks for reading, and please reach out anytime.

Ray Trevisan is an Authorised Representative (AR:001250963) of Lifestyle Asset Management, who is the holder of an Australian Financial Services License (AFSL:288421). Ray holds a Masters of Management from the University of Technology (Sydney), is a Graduate of the Australian Institute of Company Directors (AICD), NSW Justice of the Peace (JP), an accredited Financial Planner (Dip FinPlng) and member of the Financial Planning Association of Australia (FPA). He has over 40 years of business and investing experience, and operates the northern beaches office of OTG Capital in Newport Beach, NSW.

Click here to send an email to Ray.

Reading last weekend’s Money section about going guarantor made for some rueful thinking, and it brought to mind far too many experiences I’ve had with service people including trades, realtors and the banks when it comes to contracts and the commitments made when signing on the dotted line.

When you deal with a builder / tradesperson, they will usually present you with a Standard MBA (Master Builders Association) Contract. Keeping in mind who drafted the contract, it should come as no surprise that the document is heavily weighted in favour of the person walking onto your property, rather than you. Yet far too many people sign because the vendor says “well that’s the Standard Contract”.

To which my response is “so what”, standard never ever means mandatory.

When I pointed out the poor liability clauses, the variations allowed clause that provided carte blanche to change (mainly upwards) the cost, and the “not my fault if I damage your property clause - haha you have to pay”, I dutifully put a red line through them all and said, “no thanks, accept my changes or we don’t do business”.

I’m continually gob-smacked at the lack of due diligence (aka – read BEFORE you sign!!) that investors and buyers alike sign, and then cry foul later. Similarly, I’ll never understand why any suppliers provide goods and services to the large chains that then allow them to unilaterally drop and back date prices, so that the supplier ends up owing money to the supermarket chain. I keep reading they had no choice but to sign - you always have choice.

PLEASE, PLEASE, PLEASE understand just because they put a “Standard Contract” in front of you, doesn’t mean you don’t have the right to read it and change it to your needs if necessary. Signing $50,000 contract for an in-ground pool, and end up paying close to $100,000, because of legally permissible contract variations and "unforeseen costs" - ouch!!

How does this apply to financial planning? How many of you honestly read through the investment Information Memorandums (IMs), or Product Disclosure Statements (PDSs) that have to state the fees, the management overheads, the underlying risks and what happens when it all turns belly up? Remembering that these documents have to be approved by ASIC, so I simply pose the question, if you don’t read what you sign, who have you to blame, other than yourself. The Dick Smith ASX float of recent years is a great example, a reasonable person reading that PDS would've happily concluded (as many that didn't partake), that the valuations were off with the pixies, and the ensuing carnage was unfortunately no surprise to those in the know.

I continue to profess – let the buyer beware – caveat emptor, and if in doubt call up someone who knows, and will represent your best interests – the person holding the pen asking you to sign is usually not that person.

Thanks for reading, and please reach out anytime.

Ray Trevisan is an Authorised Representative (AR:001250963) of Lifestyle Asset Management, who is the holder of an Australian Financial Services License (AFSL:288421). Ray holds a Masters of Management from the University of Technology (Sydney), is a Graduate of the Australian Institute of Company Directors (AICD), NSW Justice of the Peace (JP), an accredited Financial Planner (Dip FinPlng) and member of the Financial Planning Association of Australia (FPA). He has over 40 years of business and investing experience, and operates the northern beaches office of OTG Capital in Newport Beach, NSW.

Click here to send an email to Ray.

As promised our follow on from last week's blog on the FPAs summation of the Federal Budget, I'm providing information and useful links to their follow up piece now for young people.

With the recently announced Federal Budget, much has been written, and the FPA's own "Money & Life" website have just completed their review titled Is the Federal Budget good news for young people to help young people understand how the budget will affect them.

This article looks at superannuation, savings, tax offsets and life cover within superannuation. We encourage you to share this article with your friends via email and/or social media.

Some of the key take away's that may be of interest to you include:

incentives for young people to savechanging tax offsets and when they are paid (hint - not until after next FY!)the ATO picking up low balance accounts (under $6k), and proactively returning them to their rightful owners

I'm calling this budget the "Clayton's tax relief", its the break you get when you're not getting a break. Its a bit of a rough pineapple to expect the electorate to swallow a raft of changes that will have to endure no less than 3 election cycles in some instances, like being lashed with a toothbrush really.

Tax relief for the low income earners are only there in their returns from July 2019, and full amount of the slated savings are only on offer to those earning to the maximum threshold, otherwise for the low earners, in reality little to no change at all.

While addressing some elements of tax bracket creep, it is higher earners that are the big winners yet again with this government.

The changes in superannuation and life cover for under 25s is very welcome and long overdue, as is the ATO stepping into management of low balance super accounts and returning them to their rightful owners.

Certainly feels like an election Budget, but then again, an election is not due until November 2019. May we live in interesting times.

Thanks for reading, and please reach out anytime.

Ray Trevisan is an Authorised Representative (AR:001250963) of Lifestyle Asset Management, who is the holder of an Australian Financial Services License (AFSL:288421). Ray holds a Masters of Management from the University of Technology (Sydney), is a Graduate of the Australian Institute of Company Directors (AICD), NSW Justice of the Peace (JP), an accredited Financial Planner (Dip FinPlng) and member of the Financial Planning Association of Australia (FPA). He has over 40 years of business and investing experience, and operates the northern beaches office of OTG Capital in Newport Beach, NSW.

Click here to send an email to Ray.

As an accredited member of the Financial Planning Association of Australia, I'm able to access a plethora of information from financial industry experts, accountants, fund managers across a variety of investment types and topics of interest.

With the recently announced Federal Budget, much has been written, and the FPA's own "Money & Life" website have just completed their review titled What does the 2018 Federal Budget mean for my retirement? to help retirees understand how the budget will affect them.

This article looks at aged care, super and the pension loan scheme. We encourage you to share this article with your friends via email and/or social media.

Some of the key take away's that may be of interest to you include:

incentives for retirees to keep workingboosting your super before you retireannuities and account based pensionsreleasing equity in your home without selling, and

I'm told the FPA will also be releasing a review that explains the change affecting young Australians as well. As soon as that comes out, I'll send that information in my blog as well.

If you're interested in these and other topics surrounding retirement, I chair a monthly meeting of the Australian Investors Association on Sydney's northern beaches, and next month, we'll be covering off some topics surrounding estate planning, wills and powers of attorney.

Thanks for reading, and please reach out anytime.

Ray Trevisan is an Authorised Representative (AR:001250963) of Lifestyle Asset Management, who is the holder of an Australian Financial Services License (AFSL:288421). Ray holds a Masters of Management from the University of Technology (Sydney), is a Graduate of the Australian Institute of Company Directors (AICD), NSW Justice of the Peace (JP), an accredited Financial Planner (Dip FinPlng) and member of the Financial Planning Association of Australia (FPA). He has over 40 years of business and investing experience, and operates the northern beaches office of OTG Capital in Newport Beach, NSW.

Click here to send an email to Ray.

The Federal Budget was handed down last night, and I'm conscious about many of my clients being retirees and their concern regarding how much can be earned inside and outside of their superannuation if they have funds outside of their Transfer Balance Cap.

There are some nice TLAs (three letter acronmyns and larger) to get you head around including the LITO (low income tax offset) - this increases your tax free threshold from $18,200 to $20,542. The government has just announced a LAMITO (low and middle income tax offset) for those with incomes between $48,000 and $90,000 (subject to legislation and Senate approval). There are also additional offsets for those on pensions etc. (please refer your tax inquiries to registered tax agents and accredited accountants through the Tax Practitioners Board (TPB).

So what does this all mean? Well put simply, more money in your pocket rather than the ATO, and with the Medicare levy staying put at 2% and a slight adjustment to the tax brackets, it all means you have to be earning quite a bit as a self funded retiree outside of the Transfer Balance Cap before you start paying tax.

There will always be nay sayers who complain they shouldn't pay any tax after they've retired, but wealth is often very contextual. Caitlin Fitzsimmons at SMH had a great article back in April, just click this link. She proffers:

... income from superannuation in pension mode is tax-free ... a couple can have $3.2 million in super and, assuming a conservative return of 5 per cent a year, they’d have $160,000 a year tax-free to live on. A low taxable income? Sure. But they’re still better off than 90 per cent of Australians.

We all live here, old and young, and it would be nice now and then to spare a thought for our youngsters (I have 3 children 23, 21 and 18 all doing tertiary studies) - if you believe they're not working hard enough, I'd ask you to look closer and maybe engage some empathy while you're at it. For those that gripe about a potential loss of imputed dividends under Shorten/Bowen, please consider the following:

The ALP first have to win the next electionThe Senate is likely to be hostile as it has been for the past 25 years, so any changes have to be approved by a bevy of Senators that won't necessarily agree with the ALP.Any changes will start enforcing some much needed diversification in our investing away from loaded shares and companies that borrow to pay dividends even when they shouldn't, simply to attract government (read tax payer funded) grants.Maybe start looking at alternative asset classes as well as shares?

I may not always agree with you, but we're all part of the same country, and it would be nice now and then to start thinking and acting that way. Thanks for reading, and please reach out anytime.

Ray Trevisan is an Authorised Representative (AR:001250963) of Lifestyle Asset Management, who is the holder of an Australian Financial Services License (AFSL:288421). Ray holds a Masters of Management from the University of Technology (Sydney), is a Graduate of the Australian Institute of Company Directors (AICD), NSW Justice of the Peace (JP), an accredited Financial Planner (Dip FinPlng) and member of the Financial Planning Association of Australia (FPA). He has over 40 years of business and investing experience, and operates the northern beaches office of OTG Capital in Newport Beach, NSW.

Click here to send an email to Ray.

It is rather difficult to ignore the coverage, hyperbole and commentary the current Royal Commission into the Finance Industry is garnering - and for all the wrong reasons.

As a recent entrant to this industry (2 years ago), I have more than enough of my own horror stories of bad advice, rip offs and just plain theft that I've witnessed and also been the victim of over many years of investing and saving for my wife's and my retirement.

As a fully financial and certified member of the Financial Planning Association of Australia (FPA), I was particularly disappointed to read in the SMH recently that the FPA actively hid the credentials and identity of a so called "celebrity" adviser for fear of damaging that person's reputation. Having written to the FPA executive, I feel certain that many members are not pleased with how the Association is portrayed in such media exposes.

I'm heartened to see that as quickly as this morning, the FPA executive have issued guidelines and media to explain themselves better, and importantly state:

The FPA does not, and will not defend institutions or individuals who have behaved poorly. The FPA’s disciplinary process has always worked to hold members professionally accountable to the requirements in the FPA’s code of professional practice, and in educating members and the community about the expectations for professional conduct, in accordance with the FPA Code.

As part of my volunteer work with the Australian Investors Association, I report into our local NSW committee relevant news and updates pertaining to the FP industry, and it is important to note that there is a very strong push within our own ranks to clean up the industry, and be considered, treated like and act as professionals.

The damage from the RC is going to be long and drawn out. The public are rightly upset and outraged at the wanton greed that is on display, and the lack of governance, oversight and compliance is a worry to us all.

Keep working with those you trust, and keep questioning your adviser about your investments, conflicted advice and accountability to you - their clients. It's difficult for me to accept any government that waters down legislation that ensures we act in the best interest of our clients - yet that has been done in recent years. Call up your politician and ask them why.

Thanks for reading, and please reach out anytime.

Ray Trevisan is an Authorised Representative (AR:001250963) of Lifestyle Asset Management, who is the holder of an Australian Financial Services License (AFSL:288421). Ray holds a Masters of Management from the University of Technology (Sydney), is a Graduate of the Australian Institute of Company Directors (AICD), NSW Justice of the Peace (JP), an accredited Financial Planner (Dip FinPlng) and member of the Financial Planning Association of Australia (FPA). He has over 40 years of business and investing experience, and operates the northern beaches office of OTG Capital in Newport Beach, NSW.

Click here to send an email to Ray.

Great blog this week from the Financial Planners of Australia website, Money and Life about spousal financial abuse. The focus of my blog on ANZAC Day is thankfully not quite so bleak, but can result in some real issues with couples as they near retirement.

If you're married, when was the last time you looked at your super balance compared to your spouse?

It would be safe bet that if you're a man, it is likely to be greater than your wife (and in some cases by quite some margin). So possibly consider making spouse contributions to the lower balance to ensure equity later in life.

Couples operating SMSFs had to review their position because of the Coalition's changes to super last year and the Transfer Balance Cap. While legislation provides for couples to have a total of $3.2M ($1.6M each) in super, many couples didn't plan for the cap and therefore find themselves not being able to "spread the load" sufficiently with the limited time available to them - so try to plan ahead now if you have the luxury of time.

The FPA articlehas some sanguine facts and figures about financial abuse, and worth noting, however I'm looking more on the bright side with regard to prevention rather than a cure. From the outset, try to ensure you and your partner are open and frank about money, the management of savings and payment of loans. A clear, concise conversation will save lots of heartache later and also flush out issues early on (check out my blog on this from last year). While we all dread infidelity in a relationship, the chances that financial infidelity destroys a marriage is just as high as the other kind of cheating.

Food for thought .... Thanks for reading, and please reach out anytime.

Ray Trevisan is an Authorised Representative (AR:001250963) of Lifestyle Asset Management, who is the holder of an Australian Financial Services License (AFSL:288421). Ray holds a Masters of Management from the University of Technology (Sydney), is a Graduate of the Australian Institute of Company Directors (AICD), NSW Justice of the Peace (JP), and an accredited Financial Planner (Dip FinPlng). He has over 40 years of business and investing experience, and operates the northern beaches office of OTG Capital in Newport Beach, NSW.

Click here to send an email to Ray.

I've had some interesting reaction to last week's blog on phone scams and internet "schemes". Following on from that, I'm taking a leaf out of my own Financial Planning Association of Australia's "Money & Life" website's article on being scammed.

I don't know many people throughout my life that have never made an investing mistake. As a planner myself, you might be disappointed to know I've made many! But thankfully I believe I've learned from them as well. The FPA article highlights some key thoughts about why people get scammed and then say nothing. Just like problem gamblers, many poor investments stay hidden. Embarrassment, loss and professional standings are compromised as a result of poor decisions or being duped - nobody likes it happening to them or their loved ones, and few like to openly admit to it.

The recent spate of Bitcoin tragedies are another example of the "Tulip Mania" of 1637 when a fad becomes a bubble, and money is made, but mostly lost by the unsuspecting.

Have a Plan - not a Fad

While this sounds like a planner touting for business, I'll be the first to direct you to an excellent Australian government website,MoneySmart to commence your financial education. If you're happy to pay for a planner, please call me, but first do some research, and this website is a great place to start your life's financial plan, and the best part? It's free!

Too Good to be True

Enough said - don't go there if it's too good to be true, there are encyclopedia written about this, so I won't prattle on - just click the Tulip link above, get rich quick schemes are nothing new.

Conflicted Advice

Whether you're getting General Advice, or a detailed Statement of Advice from an FP -

differentiate between what benefits you, and what benefits the person telling you

Certified FP's have to clearly spell this out in SoA's, general advice has "all care and no responsibility" - so caveat emptor.

Friends / Referrals

Not a bad place to start, but ensure you research and plan, losing money is bad enough, but when you do at the behest of a friend's referral - "ouch".

Thanks for reading, and please reach out anytime.

Ray Trevisan is an Authorised Representative (AR:001250963) of Lifestyle Asset Management, who is the holder of an Australian Financial Services License (AFSL:288421). Ray holds a Masters of Management from the University of Technology (Sydney), is a Graduate of the Australian Institute of Company Directors (AICD), NSW Justice of the Peace (JP), and an accredited Financial Planner (Dip FinPlng). He has over 40 years of business and investing experience, and operates the northern beaches office of OTG Capital in Newport Beach, NSW.

Click here to send an email to Ray.

As a home office dweller myself, I find my phone ringing at the most inopportune times, and the litany of marketing calls that I receive are unending.

But there is a serious side to these calls that can lead to financial ruin through schemes that involve identity theft, hacking, phishing and straight out confidence tricksters defrauding cash from people.

“Caveat emptor”, let the buyer beware, but I am still concerned for many out there who don’t necessarily know better (including my own 92 year old mum). So here are a few handy hints and tips in relation to telephone scams.

1. Do Not Call Database. You can register all your phone numbers on this Australian Government database to stop telemarketers from calling you (https://www.donotcall.gov.au/). Implemented in 2006 by the Federal Government and managed by Australian Communications & Media Authority (www.acma.gov.au), telemarketing organisations have to buy “clean lists” otherwise, by calling you, they are breaking the law.

Presently some of the biggest breakers of this law are companies selling solar energy systems.HINT#1: if you do get a call, take down all their details including their website, and if your phone presents the number that called, take a note of it. With all those details, lodge a complaint to ACMA – it takes about 3 minutes to fill out their online form. They don’t call you much after that!HINT#2: Once you register on the DNC database, the registration does NOT lapse after 1 or 2 years, that is another common trick the agents employ to suggest that calling you is okay. Take their details and register a complaint with ACMA – that’ll fix it.

2. The Telstra/Microsoft Telephone Scam. A common trick is for a call centre agent to ring and tell you that your computer is compromised, and then trick you into allowing them access to your PC, by downloading sharing software that gives them access to everything.HINT#3: NEVER, and I repeat, NEVER give anyone access to your computer. The most common trick they use is to say that Telstra controls all of the internet and phone lines in Australia. Telstra does not, the National Broadband Network (NBN) does (https://www.nbnco.com.au/). Same goes for Microsoft, having been a customer of theirs for over 30 years, they NEVER call.HINT#4: just hang up. I often feel sad for the agents, they are simply trying to earn a living, it’s the people that run these scams that are shameful.

There are a myriad of online/email scams through social media that allows viruses, trojans and most insidiously ransom software – but more on that another time.

Some sage advice, when someone you don’t know calls you on your home phone, its hardly ever going to be something that’s in your interest rather than theirs!

Be careful, register your phone numbers (including your mobile phone!) with ACMA on the Do Not Call register, and take the caller details if they still call you.

And don’t forget, the DNC listings don’t apply to registered charities, government organisations, authorised market research companies and the like, so you might still get an unwanted call every now and then.

Thanks for reading, and please reach out anytime.

Ray Trevisan is an Authorised Representative (AR:001250963) of Lifestyle Asset Management, who is the holder of an Australian Financial Services License (AFSL:288421). Ray holds a Masters of Management from the University of Technology (Sydney), is a Graduate of the Australian Institute of Company Directors (AICD), NSW Justice of the Peace (JP), and an accredited Financial Planner (Dip FinPlng). He has over 40 years of business and investing experience, and operates the northern beaches office of OTG Capital in Newport Beach, NSW.

Click here to send an email to Ray.

Almost that time again, yearly super statements are about to be sent out.

You might ask why do I need to worry about that? It’s an automatic payment made by my employer to my nominated fund, and I don’t have to do a thing.

Well hold the phone for one moment, and please consider this six-point checklist when it comes to your annual Super fund statement;

So please check, many people get rude surprises to find their super balance actually goes down, rather than up. This may be due to a bad investment strategy or fees and insurance costs eating up your balance.

You need to take this stuff seriously, this is your retirement fund, and in the end – it’s your money!!

Ray Trevisan is an Authorised Representative (AR:001250963) of Lifestyle Asset Management, who is the holder of an Australian Financial Services License (AFSL:288421). Ray holds a Masters of Management from the University of Technology (Sydney), is a Graduate of the Australian Institute of Company Directors (AICD), NSW Justice of the Peace (JP), and an accredited Financial Planner (Dip FinPlng). He has over 40 years of business and investing experience, and operates the northern beaches office of OTG Capital in Newport Beach, NSW.

Click here to send an email to Ray.

OTG Capital is pleased to announce our appointment as a Corporate Authorised Representative of our new licensee, Lifestyle Asset Management Pty Limited. You may know Lifestyle as the organisation behind the Wealthy & Wise advice franchise group as well.

LAM is an excellent organisation providing us with Regulatory and Compliance support in our day to day operations when providing Financial Advisory services. We will continue to operate from their Approved Product List which provides OTG Capital with access to literally thousands of investment offerings, every risk insurance provider and well as finance operatives in a non-aligned and non-conflicted manner.

Additionally, we will be working with LAM as we launch and deploy our mortgage fund offering "Prestito" (which means a loan in Italian), but more on that another time.

Our normal support resources of informative videos, our regular weekly Blogand commentary will continue as we did in 2017.

Our principal, Ray Trevisan will also continue his volunteer work with the Australian Investment Association (www.investors.asn.au) and contributing to local chapter discussion groups and monthly information nights.

OTG Capital wishes all our clients and readers a safe and enjoyable Easter break, and we look forward to serving your investment and advisory needs.

Ray Trevisan is an Authorised Representative (AR:001250963) of Lifestyle Asset Management, who is the holder of an Australian Financial Services License (AFSL:288421). Ray holds a Masters of Management from the University of Technology (Sydney), is a Graduate of the Australian Institute of Company Directors (AICD), NSW Justice of the Peace (JP), and an accredited Financial Planner (Dip FinPlng). He has over 40 years of business and investing experience, and operates the northern beaches office of OTG Capital in Newport Beach, NSW.

Click here to send an email to Ray.

One of the key topics in my monthly AIA discussion group has been index funds and ETFs (exchange traded funds). We had our final meeting for the year last week, and a group colleague of mine, Andrew B., presented a great summation that I'd be happy to send any interested reader on ETFs - what they are, and their pros and cons.

I often describe index or ETF investing as "trend" or "lazy" investing, and there are dangers and advantages to these methods. Given the state of the stock market bull run, I like to use a simile of a "blob of jelly" with everything moving up, the blob takes a little time, but moves upwards as well. When things start to turn, the momentum keeps indexes/ETFs moving for a little while before reacting.

And if you think this kind of investing is a passing fad,check out this story from Bloomberg I found earlier this week - the sheer size and volume of index funds and ETFs is gobsmackingly staggering - over $20T in one fund manager alone!

Seasons Greetings

This will be my last blog for the year, and for those of you who have gained some insight & knowledge from these missives, I'm pleased, and look forward to interacting with you in the new year.

I'll be away for all of January, and anticipate coming back onto my blog in March'2018. My best wishes to you and your family for the Season.

If any of these have triggered a thought or you’re not sure, please don’t hesitate to contact me for a further discussion. My initial consultation is always complimentary, and I always enjoy a coffee at my local (or we can try yours!).

Thanks for reading, I’ll have more information on my new licensee in the new year.

Ray Trevisan is an Authorised Representative (AR:001250963) of Lifestyle Asset Management, who is the holder of an Australian Financial Services License (AFSL:288421). Ray holds a Masters of Management from the University of Technology (Sydney), is a Graduate of the Australian Institute of Company Directors (AICD), NSW Justice of the Peace (JP), and an accredited Financial Planner (Dip FinPlng). He has over 40 years of business and investing experience, and operates the northern beaches office of OTG Capital in Newport Beach, NSW.

Click here to send an email to Ray.

Many of you may not know, but lists are the best (and easiest) way to attract eyeballs to internet screens. “Best 3 ways”, “longest 5 walks”, “10 worst films”. Just think about how many times you’ve clicked on these links!

With John Collett’s Sun Heraldagain offering a neat and simple list (remember KISS!!), I couldn’t resist but get on the bandwagon and precis his list for my blog, so here goes:

If any of these have triggered a thought or you’re not sure, please don’t hesitate to contact me for a further discussion. My initial consultation is always complimentary, and I always enjoy a coffee at my local (or we can try yours!). And don’t forget AIA's monthly discussion group at Dee Why if you have an interest in investing.

Thanks for reading, I’ll have more information on my new licensee in mid-December.

Ray Trevisan is an Authorised Representative (AR:001250963) of Lifestyle Asset Management, who is the holder of an Australian Financial Services License (AFSL:288421). Ray holds a Masters of Management from the University of Technology (Sydney), is a Graduate of the Australian Institute of Company Directors (AICD), NSW Justice of the Peace (JP), and an accredited Financial Planner (Dip FinPlng). He has over 40 years of business and investing experience, and operates the northern beaches office of OTG Capital in Newport Beach, NSW.

Click here to send an email to Ray.

For those of you who are my clients, I have recently written to you letting you know that I’m changing licensee.

What does this mean to you? Well in the long run, not all that much. You’ll still be getting the same local, personal service that I’ve been delivering to the northern beaches area.

So my blog is going to “hang loose” for a week or 2 while we sort some paperwork out, and as always, thanks for reading.

Ray Trevisan is an Authorised Representative (AR:001250963) of Lifestyle Asset Management, who is the holder of an Australian Financial Services License (AFSL:288421). Ray holds a Masters of Management from the University of Technology (Sydney), is a Graduate of the Australian Institute of Company Directors (AICD), NSW Justice of the Peace (JP), and an accredited Financial Planner (Dip FinPlng). He has over 40 years of business and investing experience, and operates the northern beaches office of OTG Capital in Newport Beach, NSW.

Click here to send an email to Ray.

I’m a big fan of KISS (keep it simple stupid) – first taught to me by my Army instructors when I was fresh out of school. It is a principle that has stayed with me throughout all my life, and in matters financial – more often than not, this is a great rule to live by.

Leading a monthly discussion group is a great experience because you get hit with many questions that are in the normal groove of what you expect in the financial planning / advising arena. With superannuation having got even more complex this past year, this area is the one that has the most potential to confuse.

If what you’re doing with your super (retail or industry or SMSF) is not fully understood, then bring it back to basics.

Far too many people are still chasing unrealistic returns in this current market environment where interest rates are at historical lows and look like staying there for some time yet. The time and effort being expended to squeeze an additional percentage point of return or two juxtaposed to the outcome simply doesn’t add up in far too many instances, and I can only keep saying, keep it simple!

The biggest reason super is still a great investment is TAX! The investments you can delve into are no different if you’re a retail, wholesale player or a trustee of your own SMSF. Tax is the reason we play in super, and the reason it was set up that way by Paul Keating back in 1996 so we could retire without having to worry about living on the old age pension.

Today super is a $2.2T industry that attracts a lot of attention, sometimes not the type of attention that is welcome or appreciated (scams, complexity, false information or just downright fraud!).

When you’re investigating your options, break it down into bite size chunks, and keep in mind some first principles:

What are you trying to achieve?What is your total available investment pool of funds?What is your risk profile?What is your context? (health, family, work, stage of life, commitments)

There are many proponents in the market today advocating “schemes” to enlarge your nest egg. KISS – if you’re not able to understand what you’re investing in – don’t.

Have a great day. More news on my new set up and mortgage fund when I have the details.

Ray Trevisan is an Authorised Representative (AR:001250963) of Lifestyle Asset Management, who is the holder of an Australian Financial Services License (AFSL:288421). Ray holds a Masters of Management from the University of Technology (Sydney), is a Graduate of the Australian Institute of Company Directors (AICD), NSW Justice of the Peace (JP), and an accredited Financial Planner (Dip FinPlng). He has over 40 years of business and investing experience, and operates the northern beaches office of OTG Capital in Newport Beach, NSW.

Click here to send an email to Ray.

Nice to feel vindicated now and then when you write something in a previous blog and it turns out to be right.

Some time back I wrote about credit card loyalty programs and their points awards systems not delivering value for money. Caitlin Fitzsimmons in Sunday paper’s Money Section has a rather expansive article that can be easily condensed into some key points:

Again, some of this advice may seem self evident, and the government’s MoneySmartwebsite is again a real winner in helping consumers out. Always try to pay your cards off – ASIC has a great example of having a $1000 balance that takes 8 years to pay off if you only ever pay the minimum amount at 20.74% interest. Your payment is almost double at $1995!

I’ll keep harping, and harping – it takes 25 times more effort to pay off debt than to save for the same amount. And add the power of compounding and you’re streets ahead (or behind if you’re paying that compounding interest!!).

Have a great day, and I trust you only lost on yesterday’s Cup would you could truly afford. More news on my new set up and mortgage fund when I have the details.

Ray Trevisan is an Authorised Representative (AR:001250963) of Lifestyle Asset Management, who is the holder of an Australian Financial Services License (AFSL:288421). Ray holds a Masters of Management from the University of Technology (Sydney), is a Graduate of the Australian Institute of Company Directors (AICD), NSW Justice of the Peace (JP), and an accredited Financial Planner (Dip FinPlng). He has over 40 years of business and investing experience, and operates the northern beaches office of OTG Capital in Newport Beach, NSW.

Click here to send an email to Ray.

10 things to improve your bottom line ... my weekend reading always has me scouring the Sunday papers, and I enjoy the letters that readers send into the Money section of the Herald. This week was no different, and the back page was great given I have 3 adult children that are still in the family home, and likely to be for some time yet.

We’re a rather political house to be honest, and as left leaning as we may tend to be, we still all like money, and I’m keen to ensure my kids are well versed in the basics of financial management.

"10 money moves you can make in your 20s" rang a bell simply because those lessons still apply now to people in their 40s, 50s and well beyond!

Check these out, and let me know how many you have ticked off the list, the full article can be viewed at this link. I think you’ll like it a lot!

Have a great week, and thanks for reading, more news on my new set up and mortgage fund when I have the details.

Ray Trevisan is an Authorised Representative (AR:001250963) of Lifestyle Asset Management, who is the holder of an Australian Financial Services License (AFSL:288421). Ray holds a Masters of Management from the University of Technology (Sydney), is a Graduate of the Australian Institute of Company Directors (AICD), NSW Justice of the Peace (JP), and an accredited Financial Planner (Dip FinPlng). He has over 40 years of business and investing experience, and operates the northern beaches office of OTG Capital in Newport Beach, NSW.

Click here to send an email to Ray.

Many of you that I've met in the past year or so since becoming a financial planner, know I've been working hard to set up a mortgage fund - or more accurately, a Residential Mortgage Backed Security (RMBS).

Not sure? well another term I've heard used to describe this offering is "Asset Lending" - the use of an asset to secure (or collateralise) a loan. The whole reason OTG Capital was set up is to launch such an offering, and if you're wondering is this kind of offering new? Absolutely not. This kind of lending has been around for a long time, we've just known it by many other names.

The simplest form of Asset Lending there is today is your own mortgage with a draw down facility. You've borrowed money from one of the major banks, and they hold security (aka mortgage), over your home. If you don't pay your mortgage, they usually come and take your house, sell it to recoup their money, and if there's anything left over after the lawyers, agents and government have all taken their share - good luck to you.

Our new fund will be set up to pool investors money in order to provide similar loans but more so to business clients who aren't always able to secure loans from banks. This is often referred to as the secondary lending market. The risk profile for this offering is a little higher than a standard mortgage, and we'll be explaining more fully how we deliver excellent returns in this current low interest market environment.

Similar RMBS's are also available from Perpetualand La Trobe Financial, to name a few.

What changes are coming? I'm hoping to launch our RMBS between now and end of the year, and with this I will also be moving to a new licensee structure to help me make this happen (watch this space).

I'll still be blogging weekly, and my financial planning practice is still thriving, thanks to my current clients. I'll soon be in touch directly outlining what's happening.

Happy investing and thanks for reading.

Ray Trevisan is an Authorised Representative (AR:001250963) of Lifestyle Asset Management, who is the holder of an Australian Financial Services License (AFSL:288421). Ray holds a Masters of Management from the University of Technology (Sydney), is a Graduate of the Australian Institute of Company Directors (AICD), NSW Justice of the Peace (JP), and an accredited Financial Planner (Dip FinPlng). He has over 40 years of business and investing experience, and operates the northern beaches office of OTG Capital in Newport Beach, NSW.

Click here to send an email to Ray.

As a financial planner, I’m often bemused by the number of people who will approach me and ask for the latest “hot stock tip”, or what I suggest is the best way forward for them in their particular investment environment.

This is the conversation I dread the most when I’m engaged in volunteer work that I do for my local chapter of the Australian Investors Association, and I’ll be soon taking up another role to assist in financial education called Banqer – but more about them next week.

Never is the old adage of “there’s no such thing as a free lunch” ever truer than when it applies to financial advice and financial planning. FP’s are wary today more than ever as ASIC are ”shadow shopping” planners at anytime, anywhere to ensure compliance.

Why do I hate this question so much? Here are a few simple ones to begin with:

In 3 simple questions, I can highlight why any financial planner worth their salt will NEVER give you any free advice, or at the very least temper it with disclaimers and “general advice” warnings. It also explains why Fact Finds, Client Questionnaires and Risk Profiles are mandatory requirements before we move forward for ANY engagement.

So, if you’re not interested in paying for a financial planner (and PLEASE tell me which doctor in Australia today will provide you a diagnosis without being paid either by you or by Medicare) – then stick to “free advice” and don’t pester us.

If you like reading and researching, I’d suggest you possibly try some of these sites on the internet to begin with – some are government run, others are industry run, and some private.

There are many, many more, and as always; when someone is offering “free advice” check if that advice is conflicted in anyway (vested interests etc). Of the list above, ASIC, FPA and the not-for-profits are the pick for non-conflicted advice.

Happy investing and thanks for reading.

Ray Trevisan is an Authorised Representative (AR:001250963) of Lifestyle Asset Management, who is the holder of an Australian Financial Services License (AFSL:288421). Ray holds a Masters of Management from the University of Technology (Sydney), is a Graduate of the Australian Institute of Company Directors (AICD), NSW Justice of the Peace (JP), and an accredited Financial Planner (Dip FinPlng). He has over 40 years of business and investing experience, and operates the northern beaches office of OTG Capital in Newport Beach, NSW.

Click here to send an email to Ray.

One could be mistaken for thinking that Australian banks have had an attack of the “guilt’s” and finally done something good for their consumers. I’m not so sure.

Noel Whittaker in this past weekend’s paper thinks so as well. I’ve been banging on to my clients and family (and anyone else who’ll listen), that using other bank’s ATM’s is a trap, and for many who don’t realise, ends up costing themselves hundreds of dollars every year in access fees.

Repeating my dear old Dad’s saying, "take care of the cents, and the dollars look after themselves."

So what are we to make of the banking sector’s benevolence (and note on a Sunday, how quickly the other 3 major banks managed to follow “which bank” down the same path)? Well I call BS on the lot of them frankly.

If they were serious about helping consumers out here are some handy hints:

Whittaker’s take on the whole ATM fee thing is sanguine; as to him (and me), it’s all simply smoke and mirrors. “Look over there!!”, while they pinch money from another part of your wallet.

And to that end, with more micro transactions and online commerce making cash (and ATM’s) redundant, the fees bonanza, that is banking at its cruelest, will continue on unabated. I sincerely doubt that even if we have a change of government and a promised royal commission into banking comes about - nothing will change, this sector is in need of generational change and regulatory overhaul. It is absolutely clear that 'self regulation' is akin to having the vampires in charge of the blood bank.

And CBA spinning off Comminsure and retiring their CEO is simply window dressing. The industry is still punch drunk and greedy on its profits, as is the vested interests in keeping it that way.

What to do in the mean time? Keep shopping, and change your financial institutions when you need to. Handy tip, I recently recommended to a client they consider their local credit union,for loans and everyday accounts I believe they are a great alternative.

Happy investing and thanks for reading.

Ray Trevisan is an Authorised Representative (AR:001250963) of Lifestyle Asset Management, who is the holder of an Australian Financial Services License (AFSL:288421). Ray holds a Masters of Management from the University of Technology (Sydney), is a Graduate of the Australian Institute of Company Directors (AICD), NSW Justice of the Peace (JP), and an accredited Financial Planner (Dip FinPlng). He has over 40 years of business and investing experience, and operates the northern beaches office of OTG Capital in Newport Beach, NSW.

Click here to send an email to Ray.