I want to save tax and increase my family’s wealth.

If you're new here, you may want to subscribe to my RSS feed. Thanks for visiting!

Q. I work in the mines, income $97,000 +/- a bit. Have a salary sacrifice vehicle, a wife (at home mum) with 4 kids 7 years old and under.

My Home is valued at around $450,000 owing $340,000, no credit cards and a personal loan $45,000 owing $35,000 (extensions and shed). About $10,000 is in various shares which I have bought over the years and $100,000 in super.

I would like to save some of the tax $’s which I pay and enter the investment property market (negative gearing) or another income generating project to get my family in a better Financial position.

With the way property is going and the expected increase over the next years. However My lender (suncorp) says I don’t have enough security / cash flow to purchase A rental property. I have also heard about other firms (RPM Nation wide)

Where by using a rental income to reduce your principal home loan using offset accounts and capitalizing the interest for a larger tax advantage.

Would you be able to suggest an appropriate strategy for my family to increase our wealth?

Josie’s answer - Thanks for your question. Not sure if you are going to be doing cartwheels once you read my advice. Read more

Share Market Volatility - Podcast

The volatility of the Share Markets has been well documented recently with millions of investors all over the world feeling the effects. One of the question’s we get a lot on our national radio show “Money Matters” is “The Share market has dropped, we’re losing money, should we sell?”

This weeks Ask Josie Kay Podcast is taken from a radio interview Josie did with Nerissa Pace on her night time talk back show “Talking Back the Night” and looks at the Share Market.

As usual Josie’s advice flies by at a great rate of knots, so make sure you grab yourself a pen so you don’t miss any of her excellent advice…where else will you get this kind of advice free?

(Podcast on next page)

Read more

What is a Wrap Account?

Q. What is a Wrap Account and what are the advantages of having one?

Josie’s Answer - Sometimes Wrap accounts are also known as master trusts. Basically they are an “administration service” that allows you and other investors to pool your money, so that you can access managed funds at wholesale prices.

For example, the investment management fee for the average retail managed fund is approximately 2%, whereas the average for wrap accounts tends to be 0.5 – 1.5%.

The cost depends on what the fund manager wants to charge (some think they are better than others! But are they?). Read more

Please tell me when the share market started to decline

Q. I listen to the show every week. Could you please tell me with reasonable accuracy when the share market started to decline. Thanks Robyn

Josie’s answer: Hi Robyn. Thanks for your question and I am crossing my fingers that your investments have not suffered too much with the recent volatility.

I am assuming you are referring to the All Ordinaries Index, which represents the top 500 stocks listed on the Australian Share Market.

This index appears to have peaked on 1st November 2007 at 6853. As at today’s date (2nd April 2008), the index closed at 5544, which means it has dropped approximately 19% since that date (as you would know it has been lower!).

To get back to its peak, the market now needs to increase by nearly 24%. Who knows when it will reach its peak again, but historically speaking it is not unusual to see it exceed its previous high within 5 months. Read more

Currency fluctuations and investing

Q. I have some money invested in international shares. How does the fluctuations in the $A affect my return?

Josie’s Answer - Once a decision has been made to invest in a security of another country, it automatically involves an investment in that currency.

An investment in an American share will mean that the return will be affected by any movement in the US Dollar relative to the Australian dollar. If the US Dollar strengthens, then the value of an investment in a US share will also strengthen.

So depreciation of the Australian dollar adds value to an overseas investment, and an appreciation of the A$ means that it will detract from returns. If you are invested in a managed fund (and you probably are through your super), some fund managers have the option to employ hedging strategies or active management of currency.

Hedging is a tool employed as insurance, to protect a portfolio from future exchange rate variations. If you fund states it is ‘unhedged’ it means that it will benefit from a depreciating $A, but the return will reduce by an appreciating $A. Read more

« Previous Page