Income protection insurances
Income protection insurance is essential for all people who would suffer financially if they were unable to earn income from working. This includes single people whose own lifestyle would suffer if they were unable to earn income as well as people who have financial dependents, such as parents.
What kind of return is better: cash or capital growth?
Investment returns come in one of two forms. Different forms of investment return suit different investors. This article will help you decide which form of investment return you should be targeting.
Positive gearing into property
Positive gearing lets you make a profit on your investment from day one. Provided there is no capital loss, this can be a great way to make money. Problem is: everyone else has thought of that, too. Positive gearing a decent property investment is hard.
Negative Gearing and Shares
When most people think of negative gearing, they think of property. But negative gearing can occur with any asset for which some or all of the purchase price is borrowed. This article provides a worked example of negative gearing using an Exchange Traded Fund (ETF) to buy a diversified portfolio of shares.
There is such a thing as a happy loser!
Many people regard life insurance as a grudge purchase. Something they have to buy, not something they want to buy. This is exactly the wrong way to think about things. After all, how many things do you buy and hope you never use?
Repaying deductible debt? Here’s a better idea.
If the interest on your debt is deductible, then repaying the debt might not be a very good move. Often, there is a much better use for your money.
Opportunity Cost
There are two ways to think about the price of anything. The first is the number of dollars it would cost to purchase that thing. The second is to think about what else we could spend our money on. This is called ‘opportunity cost’ and it is always worth remembering when you make a purchase.
Your most important asset
What is your most important financial asset? Is it your home? Your superannuation fund? Your investment portfolio? Your sports car (probably not!)? Actually, it’s you.
Not all debts are the same. Even if the interest rate is.
Did you know that two loans that look identical can have a radically different impact on your financial management? The difference lies in whether interest on a loan is deductible or not.