How To Create Secure Financial Future?

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Post on 22-Nov-2014




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This E-book is all about how to secure yours and your family\'s financial future?It explains various strategies of wealth creation, wealth management, wealth protection and wealth distribution.It would be valuable read to person who is looking to take control of his financial future.


  • 1. Are you readyto take controlof yourfinancialfuture?Prepared byFortune Wealth Creation Group
  • 2. Copyright Fortune Wealth Creation GroupWhat is Financial Planning?Financial planning is all about making sure that your current and long-termfinancial needs are met in the best possible way. 1. Protecting what have you got - your income and assets 2. Creating a investment portfolio to create long term wealth 3. Maximising your investments 4. Minimising your tax 5. Maximising your superannuation & Retirement Planning 6. Estate planningAt its best, financial planning is a long-term partnership that begins and endswith your goals. 2
  • 3. Copyright Fortune Wealth Creation GroupFinancial Planning Process:Financial planning isnt just about making money. Its about creating newopportunities to reach your goals and dreams. Fortune Wealth Creation Group offersstraightforward, professional advice so that you can get the most out of your money,finance your dreams and plan for your future. 3
  • 4. Copyright Fortune Wealth Creation GroupThe benefits of financial planningIt pays to have good adviceIt gives you direction and control.Can you imagine jumping into the car to drive across town to a street and suburb youvenever been to before without a street directory? How would you know if you were heading inthe right direction?Financial advice provides you with a roadmap. Your financial adviser will prepare apersonalised plan detailing your current position and recommend solutions to reach yourdestination (goals).Advice can help make your money work harder.Recommending solutions that take advantage of tax concessions or investment options thathave a higher return potential for the same level of risk means that your money may growmore.You may avoid making expensive mistakes.People make investment decisions that are influenced by emotions. Lets face it, money canbe a very emotional issue. A financial adviser can provide impartial advice which focuses onand encourages successful investment behaviour without emotional ties.How to reduce debt and start a wealth creation plan.Planning for Retirement. The amount of money you need to have accumulated to providefor the standard of living you want in retirement. How to maximise your retirement savingswith both social security and tax laws.Protecting your estate. How to plan and manage the transition of your estate should youdie or become incapacitated to such an extent that you can no longer make the necessarydecisions regarding your investments.Protection of your assets and goals for you and your dependants through the use ofinsurance can be a vital part of your financial plan. 4
  • 5. Copyright Fortune Wealth Creation GroupProtecting your income and assetsA key component of your financial planInsurance protects what you work hard to earn and save, and this is why it can be the criticalcomponent of any financial plan. To simplify things, it can help to look at insurance as fallinginto two broad categories protection for the things you value and protection for the peopleyou love.Life insuranceOrganising life insurance is important when planning for the future, as it can help your familycarry on if an income earner is injured, ill or passes away.Income protectionIf youre unable to work due to illness or injury, income protection can replace up to 75 percent of your regular income and cover your regular super contributions.An average individual age 25 years earning $51,235 p.a. will earn more than $3,863,184 inhis or her working life, assuming 3% inflation. To protect this amount it will cost them as littleas $40 per month, which would be tax deductible. 5
  • 6. Copyright Fortune Wealth Creation GroupTotal and permanent disability coverProvides a lump sum payout if you become totally and permanently disabled.Trauma coverTrauma cover provides peace of mind should you suffer a major illnesses or injuries, such asheart attack, stroke, cancer or blindness. 6
  • 7. Copyright Fortune Wealth Creation GroupGrowing your wealthSuited to your investment needsBuilding an investment portfolio can help you create a more secure and sustainable financialfuture and give you the freedom to live life how you want to, not how your bank balancedictates. We give you professional advice about which investment option, or mix ofinvestments, best suits your individual needs.Managed fundsIf youre looking for access to a variety of sophisticated investment types, or asset classes,managed funds may be right for you. Theyre an easy way to diversify your portfolio, andyour money is managed by professionals.Investment Growth BondCombining the benefits of a managed fund with the security of a life insurance policy in asimple, tax-effective investment vehicle, the Investment Growth Bond offers a range ofinvestment options. 7
  • 8. Copyright Fortune Wealth Creation GroupMaximising your investmentsInvestment strategies to get the most out of every dollarCreating an investment portfolio is one thing. Managing it is quite another. There are a rangeof smart investment strategies and techniques you can use to supercharge your investmentsover time.DiversificationRisk is an intrinsic part of investing. One of the most effective ways of managing investmentrisk is through diversification, or by spreading your money across a range of differentinvestments and investment types. Owning a diverse portfolio should help you achievesmoother, more consistent investment returns over time.Think in years, not daysUps and downs are intrinsic to the markets, so its important to stay focused on your long-term goals. When markets fall in value, some people are tempted to sell their investmentsand buy back in later. This approach may initially seem sensible, but really its time in themarket, not timing the market that determines your wealth.Regular investingMaking regular contributions to your investments is a great strategy for boosting your assetsover time and enables you to take advantage of other investment strategies, such as dollarcost averaging. With as little as $1,000 to start, and by adding just $100 a month, you canstart a regular investment plan into a managed fund or superannuation.CompoundingCompound interest is what happens when you earn interest on your interest. Its one of theeasiest and fastest investment strategies for boosting your portfolio balance. The longer yourmoney is invested, the bigger the effect compounding can have, so to take full advantage ofthis strategy, think about starting early.Growth investmentsRisk can be a good thing. Investing in slightly riskier options is a strategy that can deliverhigher returns and help you to reach your goals faster. Your returns on growth investments,including property investing, Australian shares and international shares, may potentially behigher than those of traditionally defensive, or conservative, investments, such as cash.Risk vs. returnDifferent types of investments carry different levels of risk, and also different returns. As ageneral rule, the larger the potential return, the higher the investment risk. Before you createa portfolio, its important to understand your tolerance for risk, techniques for managing risk,the relationship between the risk you take and the return you may receive. 8
  • 9. Copyright Fortune Wealth Creation GroupWhat is super and why is it important?Why superannuation is superSuperannuation is a type of long-term investment designed specifically to help youaccumulate the savings you need to live the life you want in retirement.There are a few ways you can save money in super:If youre employed, your employer should be contributing a minimum of 9% of your salaryinto super on your behalf each year. These funds are known as super guaranteecontributions.You can also choose to forgo some of your salary in exchange for your employer agreeing tomake increased contributions into super. This is known as salary sacrifice.You can make additional contributions to super from your after-tax salary. Just be sure not toexceed your annual contribution caps, as determined by the Australian Taxation Office.To help ensure your superannuation savings are there for you in retirement, the governmentplaces restrictions on when and how you can access your super earnings. Generally youneed to wait until you retire to withdraw these funds or until you reach your preservation age.When you turn 60, provided you meet a condition of release, you can withdraw your superas a tax-free lump sum or convert it into a tax-free retirement income stream. If you startwithdrawing your super before you turn 60, you will have to pay tax on it, although part of itmay be tax free.What are the benefits of saving through super?Certain advantages make saving through superannuation more tax-effective than otherinvestments, which means your savings could grow faster. For example, any contributions youremployer makes, as well as any returns you earn on your super, are taxed at a maximum of15%, rather than at your marginal tax rate.If you make super contributions on your own, you could also be eligible for special taxconcessions.Having your super locked away until you reach retirement ensures your savings will be usedfor one purpose only to help you achieve your financial goals and secure the retirementyoure looking forward to.Why is super so important?As its unlikely that the government Age Pension alone will give you the financialindependence you deserve for the 20 or more years youre likely to spend in retirement,superannuation is key. 9
  • 10. Copyright Fortune Wealth Creation GroupHow does it compare to other investments?The advantages of superWhen it comes to saving for retirement, superannuation is specifically designed to help youaccumulate funds in an easy, tax-effective way.Investment earnings in superThe money you earn over time from superannuation is taxed at a maximum of 15%. Incontrast, earnings on investments outside of super, such as managed funds or direct shares,are taxed at your marginal tax rate.Contributions to superIf you contribute to super through salary sacrifice (that is, by forgoing pre-tax salary), thecontributions will be taxed at 15% in the fund, which is likely to be lower than your marginaltax rate.Any personal contributions you make to super from your after-tax salary are called non-concessional contributions. There is no contributions tax on these funds when youcontribute, although earnings are still subject to 15% tax.Withdrawing your superIf you meet a condition of release, you can withdraw all of your superannuation tax free ifyou are aged 60 or over, whether you take it as a lump sum or withdraw it gradually througha retirement income stream.There are advantages to be gained from the latter. If you transfer your super to an allocatedpension, annuity or similar product, rather than take it as a lump sum, you are not chargedany tax, and you will not pay any tax on income received if you are 60 or over. If you areunder 60, you may have to pay some tax on your super income, although tax offsets may beavailable. 10
  • 11. Copyright Fortune Wealth Creation GroupRetirement optionsLive the life you wantThere are many options for accessing your retirement savings, both before you retire andonce youve stopped working. Choosing the right retirement option can save you tax andgive you more flexibility to achieve the lifestyle youve always dreamed about.Allocated pensionsAn allocated pension gives you a regular income funded by your super savings. You havethe option to choose how much income you wish to receive, as long as its above a minimumpercentage of your account balance, or you can make lump sum withdrawals. There can besignificant tax benefits to retirees who roll their super into this type of retirement option, andFortune Wealth Creation Group can help you understand and take advantage of them.Pre-retirement pensions (For People who are over age 55)A pre-retirement pension lets you draw a regular income while youre still working, offers taxadvantages and gives you greater flexibility as you prepare for retirement. With this option, itmay be possible to access your super once you reach your preservation age, and in mostcases, youll pay less tax on your pension income than you would on equivalent salary orwages. The pre-retirement pension option is not for everyone, though, so its wise to seekprofessional financial advice before setting one up.AnnuitiesAnnuities provide a retirement income stream of regular payments over an agreed-uponperiod. Payments are guaranteed, and they can be linked to increases in living costs.Annuities are generally a far more tax-effective retirement option than cashing out yoursuper.Investment Growth Bond : Combining the benefits of a managed fund with the securityof a life insurance policy in a simple, tax-effective investment vehicle, the Investment GrowthBond offers a range of investment options. 11
  • 12. Copyright Fortune Wealth Creation GroupWill & Estate planningWhat you need to knowYouve worked hard to build your wealth, so its important to consider what will happen toyour money and assets when you or your partner passes away.Estate planning involves much more than having an up-to-date will. A good estate plan willstructure your estate so you can distribute your assets according to your wishes, protectyour familys interests and minimise tax.As part of your estate plan, youll need to: Ensure that your will is up to date (a solicitor can help you put one together) Have adequate life insurance Understand the tax consequences of how your assets are distributed Implement a binding death benefit nomination on your superannuation Put in place an enduring power of attorney Create a business succession plan, if necessaryEstate planning can be complex, with many different factors to take into account. Forexample, how your assets are distributed according to your will may have tax consequences.You need to consider these issues when drafting your will and creating your estate plan.There are a number of strategies you can use to help make your estate plan as effective aspossible, and this is an area where professional financial advice and your taxation advisercan make an enormous difference for you and your beneficiaries. 12
  • 13. Copyright Fortune Wealth Creation GroupCase Study 1: Transition to Retirement for peopleover age 55 and still workingMatthew is aged 55 and wants to cut back his working hours. While his pre-tax salary will reducefrom $60,000 p.a. to $40,000 p.a., Matthew doesnt want to compromise his lifestyle.By commencing a transition to retirement pension and drawing a pension income of $15,820 p.a.from his super funds of $400,000, Matthew will meet his after-tax income goal of approximately$46,000 (see table below).The reason that the $20,000 drop in employment income is replaced by only $15,820 in pensionincome (to get the same level of income net of tax) is due to the tax-effectiveness of the pensionincome.Drawing the pension entitles Matthew to two tax offsets: A 15% tax offset on the pension income and the mature age worker tax offset. Before AfterSalary $60,000 $40,000Non commutable allocated pension income Nil $15,820Total pre-tax income $60,000 $55,820Less tax payable ($13,500) ($9,310)Net Income $46,500 $46,510In addition to above tax savings on income tax, now he will pay 0% tax on income andgrowth on $400,000 in pension fund rather than paying 15% on super fund which is approx.savings of 15% of $28,000 which equals to $4,200 ($400,000*7% (average growth +income))Total savings of $4,190 (tax savings in Income tax) + $4,200 (tax savings on income andgrowth in pension fund)Total tax savings = $8,390 p.a. for next 10 years! 13
  • 14. Copyright Fortune Wealth Creation GroupCase Study 2: Insuring Your Greatest AssetYouve weighed up whether a plasma TV will fit in your bedroom, and pondered how good youdlook in a 67 Mustang. But isnt it time you talked to an adviser about how youd maintain yourlifestyle if you couldnt work?Meet JeremyHes just changed jobs and is getting serious about his finances and his future. And while hesargued the benefits of a diversified portfolio and talked up his golf swing, he hasnt spoken toanyone about securing his financial future if something happened to him. And while he had some insurance in his super from his previous employer, he hasnt checked whether hes still covered. There is a lot at stake. If you added up his $80k salary, hes looking at making $5 million before he retires! Hes insured the car and contents of his apartment, but his biggestrisk is losing his greatest asset his income.Whats more, if hes serious about beginning to grow his wealth, hell need to make sure hesprotected his ability to continue generating an income.By giving an adviser a call and talking about insurance, itll help him to stop worrying aboutwhats around the corner. And it may be cheaper than he thinks, because if he gets seriousabout his finances while hes young, its possible to lock in a lower rate of insurance until heretires.Have you considered How much you will earn in your lifetime? That insurance in corporate super usually provides limited cover. What would happen to your lifestyle without your income? 14
  • 15. Copyright Fortune Wealth Creation GroupIs financial planning for you?Opportunity at any age or stageTheres really never a bad time to organise your finances and start planning for the future. Atcertain points in life, it may make sense to focus on savings and debt management.However, over the long term, professional and straightforward financial advice can help youmaintain the lifestyle you prefer and achieve your goals.Dont be put off by the myths and misinformation surrounding financial planning. Followingare just some of the reasons you might think its not right for you, when the reality is thatright now may be the perfect time to schedule a complimentary consultation and speak withour qualified financial planner.Im too youngActually, the sooner you develop a financial plan, the more opportunities may becomeavailable to you and the more you can achieve. Even if youre just starting out in theworkforce and dont have significant disposable income to invest, we can help you ensurethat your income is protected while youre saving, or put in place a small investment portfolioto help your money grow.Im too oldEven if your retirement begins tomorrow, or has already begun, its not too late to benefitfrom gaining financial advice. We can work with you to set up income stream options (likeannuities and allocated pensions), establish a regular income in retirement, get your estateplans in order or adjust your investment portfolio to suit your new situation or even a newhobby.Ive always managed my own financesIf youve done this well on your own so far, imagine what you could achieve with a freshperspective and professional advice. We wont tell you how you should be running your life,but we will offer you insights into how to make your money work harder for you, and anyopportunities that you may be missing out on.I dont have enough moneyWhile its true that youll get more out of seeing a financial planner if you have disposableincome to invest, we can also help you protect your income and savings while youre raisingmoney to invest or identify ways to maximise your super.Financial planners are just trying to sell their own productsAt Fortune Wealth Creation Group, we talk goals first and money second. We recommendinvestment and insurance options as appropriate in developing a financial plan to reach yourspecific goals, potentially including a range of options and products offered by other financialinstitutions in Australia and around the world whichever is the best option for you. 15
  • 16. Copyright Fortune Wealth Creation Group What you will achieve from our advice:1. Your income will be secured. If you cannot go to work due to accident or illness, you will get up to 75% of your current income monthly basis up to age 65. It means you will have unlimited sick leaves up to age 65!2. Invest for your future: If you have an existing savings or surplus cash flow then we will show you how to invest to create sustainable wealth.3. You and Your family will have total peace of mind. In case of your premature death or total & permanent disability, your mortgage, your personal debt will be paid out. You will also choose to have an ongoing income for life for your family.4. Free Insurance if you are eligible: You do not need to pay from your own pocket. Better still let government pay partially or fully fund this cost for you if you are eligible. This is our top strategy for our eligible clients.5. Save fees and costs: We will minimise your fees on your existing super and insurance or offer better value.6. Save tax: If you are paying too much tax then we will show you the ways to minimise your tax.7. Invest for your child/children: If you have any child/children, we will show you how to invest for your child/children most effective way.8. If you are over 55: If you are over 55 years and still working, we will show you how to save THOUSANDS of dollars every year.9. Cut 5-10 years terms of your loan: If you have a mortgage, we will show you how to pay off your loan faster (taking off 5-10 years from your term) without making any extra repayments.10. Protecting your estate: We will also make sure that your money goes to right hands according your wish in case of your death. We will check all your nominations on your super and insurance are up to date.11. Ongoing review: We will review your situation regularly to make sure you get most benefits from new changes in tax & superannuation laws and new products in the market.12. Your family financial adviser who is committed for your success: Finally, you will have a friend just phone call away to answer all your questions regarding your financial affairs. Regards, Rashesh Bhavsar, (ADFS (Financial Planning), B.Buss, M.Eng(IT)) Financial Planner (Specialising in Superannuation, Investments and Insurance) Fortune Wealth Creation Group Suite G17E, Ground Floor, 566 St Kilda Road, Melbourne, VIC 3004 Phone no: 03 9018 5534 / 0404 000 668 Email: 16