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The long-term rise in Australian home prices has led to a huge inter-generational transfer of wealth from the young to the old. A material reversal in property values will go some way to unwinding this, creating winners and losers amongst the generations.

Australia has long had a love affair with home ownership, which is illustrated by the strong growth in residential prices over the past two decades. Prices accelerated particularly strongly over the five years to 2017 amid a strong domestic economy, low mortgage rates, tax-breaks for domestic investors and sustained interest from overseas buyers, especially from China.

These factors were supported by ongoing immigration, a widespread cultural desire in Australia to own property and a highly limited supply of new land available in the capital cities in which most Australians live and work. A flood of virtual reality tv shows based on home ownership and renovations struck a chord with aspirational Australians. A political consensus in favour of measures supportive of property owners came to be established.

This included borrowers being able to take advantage of historically low interest rates to purchase more expensive homes.

However, 2017 saw the peak in prices as lenders came under regulatory pressure to constrain lending multiples, review prospective borrowers’ spending commitments more closely and limit interest-only loans.

Furthermore, rising global interest rates have pushed up Australian mortgage rates despite domestic interest rates remaining at their historic low of 1.5%.

The withdrawal of investment buyers from the market has been followed by a more hesitant mood amongst owner-occupiers, who are either unable or unwilling to borrow the funds and provide the deposits necessary to maintain the housing market’s momentum.

Australians are likely to find themselves in very different situations depending on their home ownership history. They may be grouped into three distinct demographic cohorts, many of whose members share some broad characteristics.

Millennials

Most Australians under the age of 35 have struggled to gain a foothold on the housing ladder. By the time they had found settled jobs and saved deposits, they found that house prices had risen beyond their reach.

Sometimes characterised as the ‘smashed-avocado generation’, this group has tended to prioritise experiential spending over property acquisition. This may be partly due to a cultural shift in society, but undoubtedly at least partly reflects the low possibility of purchasing even a very modest home within reasonable proximity to work.

Property purchases have tended to be restricted to those either on the highest incomes and/or those who have enjoyed the good fortune of parents or grandparents willing and able to help fund ever increasing deposit and stamp duty payments.

There are signs that some millennials on more typical income levels have simply given up on the Aussie dream of home ownership – at least until they become beneficiaries of a future inheritance.

Families

Australians in the 35-55 age group are much more likely to be property owners. However, the 20-year upward trend in home prices has left this generation suffering varying degrees of financial stress. This has been caused by the need to take on oversized mortgages to buy their first home, typically some years after their parents would have taken the plunge into the housing market.

They are now faced with increasing mortgage rates just at the time that living costs, such as utility bills, insurance and school fees are also rising.

Accordingly, this group faces the biggest challenge as they manage their spending in the face of rising demands on their lean layer of discretionary spending.

Baby boomers

This group comprises the retired and soon-to-retire, who in Australia have been the principle beneficiaries of the long-term boom in house prices, built on low interest rates and tax benefits, such as negative gearing.

Having entered the market at much lower price levels relative to incomes, members of this group are now largely mortgage-free and sit on valuable capital gains that some have realised as they retire, re-locate and downsize.

Some members of this demographic have used gains from the property boom to help their off-spring gather the deposits necessary to get onto the housing ladder. This trend is often described as the ‘Bank of Mum and Dad’, with some analysts referring to it as the fifth biggest bank in Australia.

The boom has led to a massive intergenerational transfer of wealth from the young to old as prolonged low interest rates led to massive asset inflation, which especially affected residential housing in Australia.

However, any decline in home prices will affect these three groups in significantly different ways.

Millennials

The cohort that remains largely outside the housing market is likely to have the most to gain and least to lose from a period of falling home prices in Australia.

A significant fall in home values is not the base case of most analysts, however the more extended the correction, the more millennials will find themselves coming into reach of home ownership. Therefore, this group is viewing any extended downward trend in prices relatively positively.

Such a market correction could focus on the sale of investment properties, which could reduce the supply of rental properties and put upwards pressure on rental levels. This would be a negative for millennials not able to take advantage of falling values to buy a first home, at least in the earlier stages of a slump.

A relatively small number of this group have managed to enter the market by taking on excessively large mortgages or have bought in secondary locations where selling could become challenging. Such buyers could well face financial stress, however, these are likely to be a minority of this group.

Families

These are the people who are most exposed to a slide in home prices in Australia. This group includes the most recent entrants to the property market and thus are likely to have bought at higher price levels with larger mortgages. Unlike those who are long established in the market, many in this group will not have benefitted from much of the rise in values and thus enjoy less protection from price falls.

They are already facing the financial stress described earlier and hence are much more careful with their spending, focusing on essentials and taking advantage of cost savings found online or in discount bricks and mortar stores. This is illustrated by the high numbers of baby and kids-focussed stores closing in Australia over the last few years.

This group stands to be further impacted if a significant fall in house prices leads to them receiving lower inheritances or post-downsizing gifts from their parents.

Baby boomers

This demographic is generally mortgage-free and unlikely to move home other than to downsize to a more suitable retirement property. Thus, they are unlikely to suffer the same stress faced by families.

Their ability to make lifetime gifts and leave bequests could well be affected though, however the real impact of this will be felt by younger demographics.

Baby boomers have been the principle beneficiaries of the buy-to-let boom, and hence some members who are heavily invested in residential property will be impacted by price falls. However, even these will be affected more in terms of their ability to make gifts from reduced capital, rather than falls in the achievable rental values that provide their income.

The housing market has appeared to be a one-way bet for a long time, and the wealth level of most Australians depends largely on the point in time at which they were able to enter the market.

Younger Australians stand to gain the most from lower housing prices but will inherit less. Families will likely experience increasing financial stress from this trend, especially the more recent home purchasers or those with less certain incomes in the face of rising living costs. Most older Australians will be less affected on a day-to-day basis but the ‘Bank of Mum and Dad’ may turn out to be less liquid than had been hoped by some anticipating sizeable withdrawals.

Author: Dermot Ryan, Sydney, Australia

Source: AMP Capital 20 Sept 2018

Important notes: While every care has been taken in the preparation of this article, AMP Capital Investors Limited (ABN 59 001 777 591, AFSL 232497) and AMP Capital Funds Management Limited (ABN 15 159 557 721, AFSL 426455) makes no representations or warranties as to the accuracy or completeness of any statement in it including, without limitation, any forecasts. Past performance is not a reliable indicator of future performance. This article has been prepared for the purpose of providing general information, without taking account of any particular investor’s objectives, financial situation or needs. An investor should, before making any investment decisions, consider the appropriateness of the information in this article, and seek professional advice, having regard to the investor’s objectives, financial situation and needs. This article is solely for the use of the party to whom it is provided.

Investor uncertainty and market volatility appear to be increasing as the economy continues to strengthen, leading to higher bond yields and eventual interest rate rises.

Australian equity investors trying to navigate the choppy waters that lie ahead should ignore the day-to-day ‘noise’ of the markets and instead focus on seven key questions. The answers to these will help investors better understand the approaching dangers and opportunities.

Will Aussie banks keep paying out big dividends?

Banking has been the principle beneficiary of the 25-year bull market in residential mortgages that has followed in the wake of Australia’s housing boom.

Bank share prices have powered ahead over recent years, fueled by the sustained and predictable earnings that strong mortgage lending delivered. Retail investors in particular have been drawn to the strong growth in (franking credit-enhanced) bank dividends.

Banks have been able to capture generous mortgage lending margins because the regulatory environment has prioritised banking solvency. The banks’ balance sheets further benefitted from the 30-year decline in bond yields.

However, regulatory focus may now shift from institutional stability towards promoting customer interests, following the Royal Commission.

Meanwhile, global bond markets are now moving into a period of rising yields, even if Australian interest rates are unlikely to increase for some time yet. These trends will not be positive for bank valuations.

Moreover, personal debt in Australia has reached historically high levels, leaving many recent homebuyers looking vulnerable. The most highly indebted are now worryingly exposed to a downside shock.

Credit conditions for borrowers are continuing to tighten, as maximum earnings multiples fall and living expenses are considered more cautiously by loan officers. Buy-to-let investors and first-time buyers with modest deposits appear to be withdrawing from the market now that home prices are falling in Sydney and Melbourne.

Why are Aussie consumers looking so glum?

The high level of indebtedness is having a significant impact on consumer spending in Australia. Under-employment remains high and wage growth for large parts of the labour force remains fairly stagnant.

Families who bought their home more recently at elevated price levels and now face increasing mortgage payments are especially impacted.

This is leading many families to look much more closely at their weekly spending, especially those seeking to pay down debt.

The retail sector is seeing shoppers switch their spending to market challengers such as Aldi, where private labels are priced at a significant discount to the major grocery stores, which is forcing down pricing on the majors’ own goods.

Investing in price cutting is not expected to be sustainable over the long-term and could detract from the major supermarkets’ earnings.

A wider range of businesses that depend on such price-sensitive shoppers will struggle to grow earnings as real wage growth remains subdued and debt servicing costs rise.

When will the next capex boom ride to the economy’s rescue?

The end of the mining investment boom led to resources companies taking an extended capex holiday that has been a major drag on the Australian economy. However the depletion of older mines is now leading to investment in new facilities.

Meanwhile Federal and State governments are continuing to support infrastructure investment, often as part of asset recycling programs in an attempt to grow productivity levels.

Australia’s growing population faces energy supply limitations as many base load power generation assets need upgrading or replacement and renewable energy targets loom large. This will require a capital investment uplift in power generation and transmission assets.

Finally Australia’s LNG market is moving from a period of oversupply during which capex was highly restricted, to one of undersupply. This is leading to a renewed surge of investments in brownfield sites.

This is likely to present the opportunity for well-positioned developers and contractors to grow earnings over the next phase of the capex cycle.

How can Australia make beautiful returns from a Beautiful China?

President Xi recently announced the intention to build a “Beautiful China” that would reduce the country’s toxic levels of air, water and soil pollution.

Older polluting coal power stations are likely to be shut. However, while the country is expected to continue importing high volumes of Australian coal, cleaner fuels such as LNG may grow in relative importance. Australian companies are expected to continue to benefit throughout this shift as they begin to invest in new LNG projects again.

In addition to ongoing demand for high-grade seaborne commodities, Australian companies exposed to China’s growing demand for clean energy, electric vehicles and batteries have the opportunity to grow earnings.

How will regulatory change impact companies?

The Federal Government in Canberra is now intervening much more actively across a number of areas of the economy. This is motivated by a desire to bring down those costs to voters and companies that threaten the economic recovery and the government’s political fortunes.

This is especially impacting regulated infrastructure companies, where some have been assigned especially low rates of return by regulators. Consequently, the less attractive earnings outlook may start to be reflected in companies’ market valuations.

Therefore, investors should be cautious about the wider regulated utility market, especially transmission assets facing government pricing decisions. The implementation of the National Energy Guarantee by the end of 2018 is likely to influence the returns and valuations of a range of energy businesses.

Meanwhile, gaming reform that impacts margin bets, advertising and taxation poses a potential threat to companies in the sector.

However media deregulation may well permit increased consolidation in the industry, which will potentially be supportive of earnings and valuations.

Which companies will be bitten by rising bond yields?

Rising global bond yields have been signaling the start of the return to more normal levels of interest rates for some time now. The rate-hiking cycle is well advanced in the US and has now started in the UK and some other markets.

Such an environment is generally considered to be negative for the market valuations of companies whose earnings are relatively stable and predictable. These include those in the infrastructure, listed real estate and telecommunications sectors. This is because as bond yields rise, investors apply a higher discount rate to their expected earnings, which reduces the implied valuation levels.

Therefore a cautious approach to these sectors is likely to be appropriate during the next phase of the business cycle.

However, certain companies in these markets are nonetheless able to grow earnings independently of the business cycle. These include real estate companies exposed to the growth of data centres and e-commerce, which are poised to outperform the market even during a period of rising interest rates.

Should I be investing in growth or income companies?

Australian growth companies have strongly outperformed value/income stocks since the last round of Chinese economic stimulus. This is to be expected during a stage of the economic cycle when earnings growth is generally positive and interest rates remain at historically low levels

However, the valuations of growth companies are now notably high, trading at large premiums to their 10-year average price/earnings ratio and relative to the wider Australian equity market.

Such lofty valuation levels require very strong and sustained earnings growth in order to justify the present market premiums. Therefore many growth companies appear to be highly vulnerable to any events that slow the upward path of corporate earnings.

Hence investors may now find more attractive opportunities in companies that are characterised by sustainable dividend payouts and/or more attractive valuation levels.

Author: Dermot Ryan, Sydney, Australia

Source: AMP Capital 22 July 2018

Important notes: While every care has been taken in the preparation of this article, AMP Capital Investors Limited (ABN 59 001 777 591, AFSL 232497) and AMP Capital Funds Management Limited (ABN 15 159 557 721, AFSL 426455) makes no representations or warranties as to the accuracy or completeness of any statement in it including, without limitation, any forecasts. Past performance is not a reliable indicator of future performance. This article has been prepared for the purpose of providing general information, without taking account of any particular investor’s objectives, financial situation or needs. An investor should, before making any investment decisions, consider the appropriateness of the information in this article, and seek professional advice, having regard to the investor’s objectives, financial situation and needs. This article is solely for the use of the party to whom it is provided.

Aussies are throwing out a massive $8 billion worth of edible food every year.

Did you know approximately one in every five bags of groceries bought in Australia gets tossed out, with $8 billion worth of edible food ending up in landfill every year¹?

We check out the cost of food waste for the average Aussie household and how you could save thousands of dollars a year just by reducing what you throw out.

Fast facts: What’s happening around the country?

• Sources say food wastage is leaving the average Aussie household out of pocket by anywhere from $1,036² to over $3,500³ per annum.

• Out of the $8 billion worth of food Aussies waste every year, fresh food accounts for 33%, left overs 27%, packaged and long-life products 15%, drinks 9% and frozen food 9%⁴.

• Over a 12-month period, it is said Aussies will waste more than four million tonnes of food, which is enough to bridge the gap between Australia and New Zealand three times.⁵

• About 20-40% of fruit and vegetables are rejected before they reach grocery stores because they don’t match supermarket or consumer cosmetic standards.⁶

• Reducing food wastage can have a big impact on the environment. This is because when food rots in landfill, it creates a gas that is 25 times more potent than the pollution that comes out of the average car exhaust.⁷

How to reduce waste and pocket more cash

1. Know what’s in your cupboard

By knowing what’s in your cupboard—fresh produce, canned food, ingredients—the less likely you are to return from the shops and realise you’ve already got one of those and two of them.

2. Abide by your shopping list

Writing a shopping list based on what’s at home and what you plan to cook during the week means you can avoid buying more than what you need and purchasing items you can go without.

3. Take note of the expiry date

Checking expiry dates when you’re shopping and positioning older items at the front of the fridge or cupboard, so they get eaten first, is a good place to start. If fruit and vegetables start to go a bit soft, also look at ways to incorporate them into soups, sauces and desserts.

4. Exercise portion control

If your meal plan for one looks more like something for a family of five, you might end up throwing quite a lot of uneaten food away. Try to buy and cook only what you need, and if you are making extra that it’s something that can be frozen or put away for a later date.

5. Store food properly

Airtight containers, snap-lock bags, fridges and freezers all play a part in prolonging the shelf life of certain foods. So, if you’ve got meat in the fridge that you’re not going to eat this week, put it in the freezer for when you do.

6. Eat the leftovers

If you’re making more food than what you can consume, rather than throw it out, pack it for lunch or save it for dinner the following night. The bonus is you won’t cook twice.

7. Say yes to a doggy bag

If you find yourself unable to finish your next restaurant meal, ask to take it with you so you can cook it up the following day. If you can stretch one meal into two – you reduce waste and the second’s free.

8. Turn scraps into compost

Compost bins and worm farms allow you to break down food scraps and at the same time create natural fertiliser for plantation you might have around the home.

9. Grow your own garden

Cost savings is one of the greatest drivers for Aussie households to grow their own food⁸. Having your own stash of herbs and vegetables means you always have access to fresh ingredients and just the right amount.

Source : AMP December 2018 

 Important information:This information is provided by AMP Life Limited. It is general information only and hasn’t taken your circumstances into account. It’s important to consider your particular circumstances and the relevant Product Disclosure Statement or Terms and Conditions, available by calling 13 30 30, before deciding what’s right for you. Read our Financial Services Guide for information about our services, including the fees and other benefits that AMP companies and their representatives may receive in relation to products and services provided to you. All information on this website is subject to change without notice. Although the information is from sources considered reliable, AMP does not guarantee that it is accurate or complete. You should not rely upon it and should seek professional advice before making any financial decision. Except where liability under any statute cannot be excluded, AMP does not accept any liability for any resulting loss or damage of the reader or any other person.

While you’ve still got time on your side, check out this list of things to think about, so you can hopefully continue the party in retirement.

Life in your 20s mightn’t seem too long ago. In fact, apart from a few extra frown lines that may have appeared over the years, you might feel as though no time has passed at all.

With that in mind, the idea of considering ‘your retirement’ may sound somewhat horrific – and understandably. I mean, isn’t that something your parents did?

Reality check – reality bites! But, putting off thinking about it may not be the answer. After all, surely you still want to enjoy life in retirement, particularly if to you, age is just a number.

So, if you’re up for getting a (hopefully) not-so-scary overview of some of the things you may want to think about, while you still have time on your side, check out the list below.

Like learning to drive a car, what may seem overwhelming at first, may not be as bad as you think once you get your head around how you plan to tackle things.

1. Do I have to retire by a certain age?

You can retire whenever you want to in Australia, but your financial situation, employment opportunities, health and wanting to coordinate with your other half could play a big part.

2. How much money will I need and where will I get it?

Industry figures show individuals and couples around age 65, looking to retire today, would need an annual budget of $42,953 and $60,604 respectively to fund a comfortable lifestyle, or $27,425 and $39,442 respectively to live a modest lifestyle (which is considered better than living on the Age Pension)1. Note, these figures also assume people own their home outright and are relatively healthy2.

With this in mind, consider how you’d like to live your life in retirement and what money you may have access to, such as super, government benefits, investment returns, savings or an inheritance.

3. Have I considered what it’ll cost to do the things I enjoy?

Life expectancy in Australia is increasing3, so spare a thought for things outside of just your living costs and utility bills.

What kind of money might you need to do the things you enjoy, such as sport, keeping up with any hobbies you might have, any travel you’d like to do and how often you see yourself eating out?

4. How and when can I access my super savings?

Generally, you can start to access your super when you reach your preservation age, which will be between ages 55 and 60, depending on when you were born. As for what you do with your super (which from age 60 you can access tax free) you’ll have a few options.

You may access a portion of your super via a transition to retirement pension (TTR), which you can do while continuing to work full-time, part-time or casually if you want greater financial flexibility.

Alternatively, if you stop work altogether, you may choose to take your super as a lump sum of money, or move it into an account-based pension or annuity, if you want to receive a regular income.

There will be different tax implications for different people and remember your super doesn’t guarantee an income for life, as it will come down to how much super you’ve saved over the years.

5. Will I be eligible for government assistance?

Along with your savings, government benefits, such as the Age Pension, could be an important part of your income in retirement, if you’re eligible, which not everyone will be.

For instance, the value of various assets you have and any income you receive (in addition to other requirements) will determine whether you’re eligible for the Age Pension and what amount of money you’ll receive in Age Pension payments.

6. Will I still be paying off my current debts?

If you’re going to be carrying debt into retirement, you may want to think about ways to reduce it sooner rather than later.

Some things you might do:

1. Work out your debts and what they total

2. Look into whether you might benefit from rolling your debts into one

3. Look at whether you can afford to make extra repayments

4. Shop around for providers with lower interest rates and no annual fees.

7. Are there other things I should think about?

• Insurance – You might have insurance, but what you require in retirement could be quite different to when you’re working.

• Investments – You might consider a more conservative approach to anything you’re invested in, as when you’re young you often have more time to ride out market highs and lows.

• Estate planning – You may want to document how you want your assets to be distributed after your gone and how you want to be looked after if you can’t make decisions.

8. Is it a possibility I might relocate or downsize?

Your living arrangements in retirement should be based on more than just your finances. Your health, partner, family and what activities you’re interested in will all play a part.

If you are set on moving to get money from your property, planning ahead could help you feel more in control as you can assess any out-of-pocket costs in advance.

9. Am I in a position to make additional contributions to my super?

The more you can put into super, the more money you could have when you retire. And, if you put some of your before-tax income into super, these amounts will generally be taxed at 15%, which is lower than the tax most people pay on their employment income.

Final thoughts

Procrastinating and leaving important decisions for another day is something many of us can relate to, but in reality the more time you give yourself to think these things through, the better off you may be.

The number of years we could spend in retirement may be many, so if a bit of planning can help make those years a little more fun, surely, it’s worth a bit of thought.

Please contact us on |PHONE| if we can be of assistance 

Source : AMP December 2018

  Important information:This information is provided by AMP Life Limited. It is general information only and hasn’t taken your circumstances into account. It’s important to consider your particular circumstances and the relevant Product Disclosure Statement or Terms and Conditions, available by calling 13 30 30, before deciding what’s right for you. Read our Financial Services Guide for information about our services, including the fees and other benefits that AMP companies and their representatives may receive in relation to products and services provided to you. All information on this website is subject to change without notice. Although the information is from sources considered reliable, AMP does not guarantee that it is accurate or complete. You should not rely upon it and should seek professional advice before making any financial decision. Except where liability under any statute cannot be excluded, AMP does not accept any liability for any resulting loss or damage of the reader or any other person.

Get up to speed with the government subsidies you may be able to claim in 2019 before the kids go back to school.

With 2019 now in motion, many parents and carers are probably looking at how they’ll cover school fees for the year ahead, not to mention other costs, which might include things like uniforms, shoes, stationery, excursions and transport.

The good news is, you may be eligible for some financial assistance through subsidies in your state or territory, which may be means tested or require you to hold a concession card¹.

State and territory allowances

According to figures from ASG, for a child born today, the total cost of schooling in a capital city (from ages 0 to 17) is estimated to be around²:

• $68,007 if they attend government schools

• $252,085 if they attend systemic/catholic schools

• $499,593 if they attend private schools.

With that in mind, it’s worth exploring some of the rebates and tax breaks you as a parent or guardian may be eligible for.

New South Wales

Children in Kindergarten through to Year 12, who are aged between four and a half and 18 (including those that are home-schooled), are eligible for an Active Kids Voucher, providing parents and guardians with $100 to put toward registration and participation costs for sport and fitness activities.

This year, the Creative Kids program was also launched, providing one $100 voucher each year to all school-aged children to help with the cost of creative classes and activities, such as music, dance and drama lessons, language classes, coding and design.

In addition, if you drive the kids to school because there’s no public transport where you live, you may be eligible for the School Drive Subsidy. 

There are also two financial support programs for eligible families who have children boarding away from home to complete their secondary education. To find out more, check out information on the Living Away from Home Allowance and Boarding Scholarship for Isolated Students.

Queensland

If you have secondary-school-age students who are attending state and approved non-state schools, you may be able to receive financial assistance to help with the cost of textbooks and other learning resources. For more details, check out the Queensland state government website.

A Living Away from Home Allowance Scheme is also available, while talented students from regional and remote areas, who aren’t eligible, may apply for Queensland Academies Isolated Students Bursary.

On top of that, a voucher of up to $150 under the Get Started Vouchers program may also be available for children who can least afford, or may otherwise benefit from joining a sport or recreation club, while there are additional funding sources that aim to support young athletes.

Victoria

Depending on your situation, your family may be eligible to receive free or discounted uniforms, shoes, textbooks, stationery and more through the State Schools’ Relief.

The Camps, Sports and Excursions Fund may also provide payments so eligible students can take part in school trips and various sporting activities.

South Australia

The School Card scheme assists with expenses, such as school fees, uniforms, camps and excursions. This is available for eligible students attending government schools.

The State Education Allowance is also available to geographically isolated parents with children at secondary level, who board away from home to attend school. The allowance assists with travel, boarding and other education-related expenses.

Western Australia

The Secondary Assistance Scheme is available to parents who hold eligible concession cards. It provides an education program allowance, which is paid to the school, and a clothing allowance that can be paid to the school or parent.

A Boarding Away from Home Allowance also assists geographically isolated families with boarding and education costs for primary and secondary-school-age children.

Tasmania

The Student Assistance Scheme assists with the cost of school levies. It provides support to low-income families to help with the cost of students in kindergarten through to year 12.

Northern Territory

The Back to School Payment Scheme provides financial assistance to parents and guardians of children enrolled in a Northern Territory school, or who are registered for home-schooling. The entitlement can be used towards things like uniforms, books and school camps.

There’s also a Sport Voucher Scheme that assists with sport, recreation and cultural-activity costs. And, you may be eligible for financial help if your child has to live away from home or travel long distances to go to school. Check out info on the Northern Territory state government website.

Australian Capital Territory

The Secondary Bursary Scheme and Student Support Fund programs provide assistance to eligible low-income earners in the state with dependent full-time students in years seven to 10.

Commonwealth Government assistance

Commonwealth Government assistance may also be available for eligible young people through Youth Allowance and various Assistance for Isolated Children programs.

There’s also a Child Care Subsidy (which replaced the Child Care Benefit and Child Care Rebate in July 2018) which may help with the cost of child care if you meet certain criteria. 

Another initiative the Australian Department of Social Services is involved in is Saver Plus – a program that’s delivered in 60 communities across the country. It delivers up to $500 in matched savings for education costs and provides free financial education workshops and support.

Other considerations

The cost of kids doesn’t come cheap, so it’s worthwhile making the most of the subsidies available to you.

In the meantime, if you need further help, speak to your school about what financial support is available. It might also worth talking to other parents who have children at the same school or schools nearby.

For further tips around budgeting and how to take control of debts, please contact us on |PHONE|

Source : AMP January 2019 

1 Money Smart – Reducing back to school costs (Government assistance with school costs)
2 ASG – supporting children’s education (Table: Calculate the cost of your child’s education)

 Important information:This information is provided by AMP Life Limited. It is general information only and hasn’t taken your circumstances into account. It’s important to consider your particular circumstances and the relevant Product Disclosure Statement or Terms and Conditions, available by calling 13 30 30, before deciding what’s right for you. Read our Financial Services Guide for information about our services, including the fees and other benefits that AMP companies and their representatives may receive in relation to products and services provided to you. All information on this website is subject to change without notice. Although the information is from sources considered reliable, AMP does not guarantee that it is accurate or complete. You should not rely upon it and should seek professional advice before making any financial decision. Except where liability under any statute cannot be excluded, AMP does not accept any liability for any resulting loss or damage of the reader or any other person.

Whatever your age, if you’re thinking of dabbling in investments like shares, managed funds or cryptocurrencies, here are a few things to steer clear of.

You might be looking to invest your money in something (whether it be shares, manage funds or cryptocurrencies, such as bitcoin) for a variety of reasons.

You may have money in savings and property, and want to diversify, or you might simply be looking to invest in something affordable, should investing in things like real estate be a bit out of your reach.

If your goal is to get rich quick (wouldn’t that be nice), spoiler alert – that’s probably not going to happen, as more often than not things like time in the market, compound interest and avoiding unnecessary risk will be the keys to success (I know, sorry to burst your bubble).

Meanwhile, if you are very close to dipping your toe in the water, here’s a list of common mistakes newbie investors tend to make which are generally worth steering clear of.

Investment mistakes beginners make

1. They fail to plan

When looking to invest, it’s generally wise to think about:

• your current position and how much you can realistically afford to invest (consider what other financial priorities you have or existing debts you may be paying off?)

• your goals and when you want to achieve them

• implications for the short/medium and long term

• whether you understand what you’re actually investing in

• whether you know how to track performance and make adjustments

• if you want to invest yourself, or with the help of a broker or adviser.

2. They don’t know their risk tolerance

As a general rule, investments that carry more risk are better suited to long-term timeframes, as investment performance can change rapidly and unpredictably. However, being too conservative with your investments may make it harder for you to reach your financial goals.

• Low-risk (or conservative) investment options tend to have lower returns over the long term but can be less likely to lose you money if markets perform badly.

• Medium-risk (or balanced) investment options tend to contain a mix of both low and high-risk assets. These options could be suitable for someone who wants to see their investments grow over time but is still wary of risk.

• High-growth (or aggressive) investment options tend to provide higher returns over the long term but can experience significant losses during market downturns. These types of investments are generally better suited to investors with longer term horizons who can wait out volatile economic cycles.

Try our ‘What style of investor am I?’ tool to help understand what level of risk you might be comfortable with.

3. They think investment returns are always guaranteed

The idea of guaranteed returns sounds wonderful, but the truth when it comes to investing is returns are generally not guaranteed.

There are risks attached to investing, which means while you could make money, you might break even, or even lose money should your investments decrease in value.

On top of that, liquidity, which refers to how quickly your assets can be converted into cash, may be an issue. Depending on what type of investment you hold or what may happen in markets at any point in time, you mightn’t be able to cash in certain investments when you need to.

4. They put all their eggs in one basket

Investment diversification can be achieved by investing in a mix of:

• asset classes (cash, fixed interest, bonds, property and shares)

• industries (e.g. finance, mining, health care)

• markets (e.g. Australia, Asia, the United States).

The reason diversifying may be a good thing is it could help you to level out volatility and risk, as you may be less exposed to a single financial event.

5. They believe the opinions of every Tom, Dick and Harry

Changing your strategy on the basis of market news may or may not be a good idea. After all, people have made all sorts of market predictions over the years, all of which haven’t necessarily come true.

On top of that, we all have that one friend that likes to pretend they’re a property, share or general investment guru, who while may come across as persuasive in their market commentary, does not have the qualifications to be giving people advice.

With that in mind, if you’re looking for guidance, you’re probably better off consulting your financial adviser who may be able to give you a more well-rounded picture of the current climate and the potential advantages and disadvantages you should be across.

6. They make rash decisions based on fear or excitement

Many investors get caught up in media hype and or fear and buy or sell investments at the top and bottom of the market.

Like with anything in life, it is easy to get stressed and concerned about the future and act impulsively but like with other things this may not be a smart thing to do.

While there may be times when active and emotional investing could be profitable, generally a solid strategy and staying on course through market peaks and troughs will result in more positive returns.

Contact us on |PHONE| for more information.

Source: www.amp.com.au

Important information:This information is provided by AMP Life Limited. It is general information only and hasn’t taken your circumstances into account. It’s important to consider your particular circumstances and the relevant Product Disclosure Statement or Terms and Conditions, available by calling 13 30 30, before deciding what’s right for you. Read our Financial Services Guide for information about our services, including the fees and other benefits that AMP companies and their representatives may receive in relation to products and services provided to you. All information on this website is subject to change without notice. Although the information is from sources considered reliable, AMP does not guarantee that it is accurate or complete. You should not rely upon it and should seek professional advice before making any financial decision. Except where liability under any statute cannot be excluded, AMP does not accept any liability for any resulting loss or damage of the reader or any other person.