If you plan on retiring at 65 years old, chances are you’ll need your retirement savings to last you around 15 to 20 years – at least. Saving for retirement can be daunting whether you’re still in the middle of your working career, nearing the end or already retired. The good news is, however old you are, there are always ways to create a more comfortable retirement for yourself. When should you start planning for retirement? The earlier you start planning for retirement, the better. Even if you think retirement is a long way off, it’s important to think about how much money you will need, what kind of retirement lifestyle you want to lead and how you can give yourself a head start. 40s and early 50s When you are in your 40s and early 50s, it’s easy to push your retirement to the back of your mind. Things like paying off your mortgage, sending your kids to school and looking after elderly parents can seem like more pressing commitments. However, taking time to plan for your retirement will make it easier for you in the long term. Good steps to take in your 40s and early 50s include: Do the maths and figure out how much you will need to live comfortably in your retirement. Don’t forget to factor in bucket list goals and travel. Sort out your superannuation. Remember if you are a business owner, you are responsible for your own super. You may prefer a self-managed super fund (SMSF). Get on top of your debt. Seek advice about ways to reduce your debt. For example, making extra contributions toward your mortgage. Consider making additional contributions to superannuation to help boost your retirement savings and reduce your tax e.g. salary sacrifice or personal concessional contributions to super. Sort out your personal insurance cover to ensure you have a safety net if you are unable to work due to a disability Illness or death. 50s and early 60s If you’re in your late 50s or early 60s, it’s not too late to start making a positive move towards a more secure retirement. This is a great time to work out a retirement plan and figure out how you want to transition out of work. Steps to take as you move towards retirement include: Make non-concessional contributions to boost your super. Consider a self-managed super fund (SMSF) to have greater control over your super. Look into a Transition to Retirement (TTR) pension if you want to reduce work hours without losing your income. Review your personal insurance cover to ensure they reflect your financial position. Over 65 years If you are already in retirement or considering your options, there are still some things you can do to make your retirement more comfortable. Considering that your retirement may last 20 years or more, financial decisions you make now can still impact your future. Things to consider if you are over 65 years old include: Get advice about what to do with your super – whether to take it out as a lump sum, start a super income stream or leave it in there. Review your investment strategy to better suit your retirement needs. Plan your living situation. If you sell your home, you may be able to contribute up to $300,000 to your super. Make sure you have the proper estate planning and that you have the right people stepping in for you to make financial and personal decisions on your behalf if you are unable. Planning for your retirement can be daunting, whatever age you are. Make sure you seek professional guidance and financial advice when making decisions about your future. The team at Design Financial Advisory helps busy business owners, working professionals and couples approaching retirement work towards a comfortable retirement that aligns with their goals.

Directly held property makes up approximately 19% of all SMSF assets, indicating that many SMSF trustees consider it’s an important and significant part of a diversified portfolio. There are numerous strategies and ways for property to form part of an SMSF’s investments and each must be carefully considered. Investment strategy first! Before any investment decision, it is imperative and a legal requirement that you as an SMSF trustee must consider your investment strategy. Your strategy should detail such things as how much exposure you would like to the property market, the form of exposure and how appropriate it is for your current circumstances. A well-diversified portfolio is essential to provide income for retirement and spread investment risk so that any single asset class, such as property, does not dominate your SMSF risk and returns. Direct investment A common form of property exposure is direct investment into a property. This can be in the form of either a residential property or commercial property. When purchasing a property with an SMSF’s cash there are some important considerations that must be worked through including: Your asset allocation and diversification. Potential rental income and property expenses. How close you are to retirement and the need for liquid assets to pay pensions. Unless the property is a business real property (BRP) you or your related parties cannot use the property: If the property is BRP you may be able to work from the premises which is owned by your SMSF. You may also be able to utilise the small business CGT concessions and contribution limits. Limited Recourse Borrowing Arrangements (LRBA) SMSFs may also invest in property through an LRBA. These are complex borrowing structures which allows SMSF trustees to take out a loan from a third party lender. The SMSF trustee then uses these funds to purchase a property to be held on trust. The lender only has recourse to the property held in the trust – this is why the loan is “limited recourse”. An LRBA should only be utilised when it is the right structure for your SMSF on the basis of SMSF Specialist advice. Some very important considerations in addition to the ones above include: Can your SMSF maintain the loan repayments over a long period of time considering asset returns, interest rates, liquidity, and contributions caps? Evaluating set-up costs and structures. Is your property valuation accurate? You cannot use borrowed money to improve the asset or change the nature of the property at any time. Do you meet the strict bank lending requirements? Typically, lenders require the SMSF to have a minimum of net assets of $200,000 or more and for the loan to have a loan to value ratio below 70%. Indirect investment Another way to gain exposure to property for SMSFs is through indirect investment. This can include listed invested vehicles such as listed investment companies and exchange traded. Managed investment trusts are also a common investment for SMSFs to gain exposure to property. Investing indirectly may suit your SMSF needs more than a purchase of a property because it is relatively simple and most likely will not require a large amount of capital. It also allows your SMSFs to get exposure to large value properties such as office blocks, shopping centres and industrial properties that would otherwise be out of reach. Investing in these products should be accompanied by SMSF Specialist advice. How can we help? SMSF Specialist advisors can help you understand how the different forms of property investment may or may not be relevant for your SMSF portfolio and the impacts it may have on you and your fund. Please feel free to give us a call to arrange a time to meet so that we can discuss your particular requirements, especially in regards to what property investment would be most appropriate for your SMSF. For further information, visit the SMSF Association’s Trustee Knowledge Centre ( http://trustees.smsfassociation.com/ ) to keep up to date with different asset classes you can invest in within your SMSF, including property, and reach your financial goals. As always, the above information is general in nature and may not be suitable for your circumstances. If you require advice, give the team at Design Financial Advisory a call today on (08) 6263 9933 to discuss your needs.

The sandwich generation is a term used to describe people who are caring for their children as well as their aging parents. It can be a stressful and tiring position to be in, and can put strains on both your financial and emotional wellbeing. It’s important to get your own finances in order first so that you can be in a better position to help aging parents or children who are ready to leave the nest. Here are 6 financial strategies to help take the pressure off. Make a plan When looking after multiple generations, it can feel like you’re being pulled in several directions at once. It’s important to take the time to make a plan and consider your own financial goals before making any big decisions. When you’ve made a plan, you can feel more confident moving forward. Talking with a financial advisor can help you consider all your options and may even open doors you may not have considered. Understand your parents’ finances As your parents get older, they may need assistance with managing their finances even if they don’t need direct financial support. You should discuss things like their assets, debts and income sources, their living arrangement goals as they get older and estate options in case they can no longer manage their own affairs. Discuss with your family If you have siblings, it’s important to talk with them about how you will divide the responsibilities of caring for your parents. Keep in mind that not all responsibilities are financial. If there is an imbalance in how much support each sibling provides, you may want to discuss the option of repayment using your parents estate if appropriate. Involve your children If you have adult children still living at home, consider ways they could help the household financially. Discuss the option of them paying some rent or covering some of the weekly household expenses. This can be a good opportunity for them to learn financial and budgeting skills before moving out for the first time. Protect your income If you have two – or three – generations depending on you, it’s important to protect your income in case something should happen to you.  Your life and total and permanent disability insurance policy should be able to take care of your mortgage and any major life expenses to ensure you and/or your loved ones are looked after. Trauma (or critical illness) insurance can provide a useful injection of money to pay for medical expenses and provide continuity for supporting loved ones while you recover. If you’re not sure what coverage you need, speak with Lawrence Group about your priorities and ways to get the best coverage for your budget. Consider government assistance Research into government subsidies that you, your children or your parents may be eligible for. Centrelink is a good place to start for childcare subsidies, rent assistance and carer entitlements. Also check out My Aged Care website to apply for an aged care assessment. Seek professional help It can feel overwhelming to be responsible for both your children and your parents and it’s important to reach out for help if you need it. Getting professional financial advice can help you feel more confident and at ease going into the future. As always, the above information is general in nature and may not be suitable for your circumstances. Chat with the Lawrence Group team about how we can help.

Healthy cash flow is a two way street. There are several things you can do to increase the amount of money flowing into your business, but you should also consider ways you can decrease outgoing cash. Here are 7 ways small businesses can reduce costs to improve their cash flow. Cut unnecessary expenses Start by taking an audit of all your expenses from production and purchasing equipment to marketing, sales and administration. Identify areas where you can save. For example, are you paying for software or a subscription that you don’t use? Take a close look at your biggest expenses – are they providing a good return on investment or do the costs outweigh the value they offer? Now might be the time to look for alternatives or scale back in these areas. Make your processes more efficient Lost time is lost money. By making your business processes more efficient you can win back time – time that you can spend on growing the profitability of your business. This could involve using automatic accounting software to handle parts of your invoicing and accounting processes. Or it may involve restructuring your business and workflows to better reflect your goals. Talk to your suppliers Consider if you are overpaying suppliers and try to negotiate better prices where possible. If it makes sense for your business, you may be able to secure a discount for buying inventory in bulk. You could also ask for an extension on your payment terms to avoid short term bottlenecks in your cash flow. If you cannot negotiate better prices from your current suppliers, take time to research alternative options. Keep a close eye on marketing Marketing is crucial for increasing cash flowing into your business. Unfortunately many small businesses end up spending a lot on marketing while getting a poor return on their investment. Closely monitor your marketing efforts, cut out the tactics that aren’t working and focus on what is getting you good results. Think about leasing equipment If buying equipment outright presents an issue for your cash flow, consider leasing equipment instead. The equipment won’t be a fixed business asset, but paying smaller regular payments to lease it may help with budgeting and forecasting. Consider outsourcing Outsourcing non-critical business tasks could be cheaper than employing someone in-house to do the job. It can also free up your team to focus on other aspects of your business. For example, hiring a marketing agency might be more cost effective than keeping your own marketing department. Outsourcing something like production can save you from expensive equipment costs and training costs. Explore remote work As the past year has proven, remote work is a viable option for many businesses. While it might not be right for everyone, choosing to have a full or partial remote workforce could lead to significant savings. With employees working from home, you might be able to reduce your office size and associated overhead costs. Chat with the team at Lawrence Group for tailored advice about reducing costs and improving cash flow for your business.

Is your Self-Managed Super Fund (SMSF) adequately diversified? SMSF trustees need to truly understand diversification and better diversify their portfolios. The benefits of a well-diversified portfolio are numerous but the key ones that SMSF trustees should focus on are the benefits of mitigating volatility and short-term downside investment risks, preserving capital and the long-run benefits of higher overall returns. By spreading an SMSF’s investments across different asset classes and markets offering different risks and returns, SMSFs can better position themselves for a secure retirement. However, did you know that 82% of SMSF trustees believe that diversification is important but in practice many do not achieve it? This is because half the SMSF population cite barriers to achieving diversification. The top being that it is not a primary goal for SMSF trustees, and they believe they have a lack of funds to implement it. Furthermore, 36% of SMSF trustees say they have made a significant (10%) asset allocation change to their SMSF over the last 12 months. This demonstrates that SMSFs may not be actively restructuring their portfolio on an annual basis to respond to changing market conditions. Another clear problem regarding diversification is the amount of SMSFs with half or more of their SMSF invested in a single investment. SMSF trustees say they primarily invest in shares to achieve diversification in their SMSF, while just a quarter say they invest in at least four asset classes to achieve this. The bias and significant allocation to domestic SMSF equities conversely may highlight the fact that SMSFs are not adequately diversified, especially across international markets and other asset classes. So what can you do? Some of the steps you, with the help of an SMSF Specialist, can take to diversify your retirement savings and control your investments in a disciplined and planned way include: Ensuring there is a clear and demonstrable retirement purposes in the choices you make. Ensuring you have an investment objective and a strategy to achieve that objective in place. Reviewing your portfolio and assessing it against the objectives you have set as often as you feel is necessary. Minimising concentration to any one asset class. Ensuring your Australian share portfolio is sufficiently diversified. Considering the benefits of geographic diversification. Ensuring your cash allocation is appropriate. Considering the benefits of exchange traded funds, listed investment companies and other digital investment platforms that allow low cost access to different markets. Always remember to document your actions and decisions, as well as your reasons, and keep them as a record in order to demonstrate that you have satisfied your obligations as a trustee. Given the importance of having an appropriately diversified portfolio and its impacts on quality of life in retirement trustees ought to consider professional assistance in managing this important aspect of an SMSF. How can we help? If you need assistance with diversification with your fund, please feel free to give the team at Design Financial Advisory a call to arrange a time to meet so that we can discuss your particular circumstances in more detail, or refer to the SMSF Association Trustee Knowledge Centre. Need tailored advice? Chat with the team at Design Financial Advisory today on (08) 6263 9933

Catch up on Concessional Contributions Business owners may be able to claim a personal tax deduction for concessional super contributions over the yearly cap. Here’s what you need to know. What are concessional contributions? Concessional contributions are contributions you make to your super fund that are tax deductible. These contributions should be made before the end of the financial year. You can contribute up to $25,000 a year. If you don’t make the full $25,000 contribution in a year, you can carry forward the unused portion to the next year. Carry forward contributions are tax deductible and can be used from up to 5 years previous. Non-concessional contributions are contributions from your after tax income that are not tax deductible. These can be up to $100,000 a year. How do catch up concessional contributions work? From 1 July 2018, any concessional contributions you did not make under the cap ($25,000) can be carried forward to the next year. This makes it possible to make a concessional contribution this year which is greater than the cap. For example, if you contributed $15,000 last year, the leftover $10,000 can be carried over to this year. This increases the cap from $25,000 to $35,000 for this year. Concessional contributions that were not made can be carried forward for up to 5 years. You may be eligible to use carry forward contributions this year if: Your total super balance is under $500,000 You made less than $25,000 in concessional contributions in the 2018/19 or 2019/20 financial years You are making concessional contributions over $25,000 this year What are the benefits? Being able to increase your concessional contribution cap for a particular year may help reduce your personal assessable income and personal income tax. By making the most of carry-on concessional contributions, you may end up with a greater superannuation balance, setting you up for a more secure retirement. Who should take advantage of catch up concessional contributions? Although anyone can make carry on concessional contributions, the benefits are particularly positive for: Self employed individuals Business owners who don’t get paid a wage People who want to retire early or improve their retirement savings If you are a business owner who doesn’t get paid a wage, the super guarantee is not a legal requirement and you are responsible for making your own super contributions. The carry-on concessional contribution gives you greater opportunity to make super contributions and save for retirement. Many business owners overlook the importance of super, but it should be a key part of their retirement strategy. If you are a business owner whose income greatly varies from year to year, the carry-on concessional contribution allows you to make greater super contributions on the more profitable years. As always, the above information is general in nature and may not be suitable for your circumstances. Before making any decisions regarding concessional contributions, it is important you seek advice to ensure this strategy is right for your situation and how it could benefit you. If you require advice, give the team at Design Financial Advisory a call today on (08) 6263 9933 to discuss your needs.

Secrets to Business Growth: Employee Retention and Company Culture These days, employees are more likely to leave a company that doesn’t suit their personal or career aspirations. That means for business owners and managers, employee retention requires an active approach. A significant part of improving employee satisfaction is developing a healthy company culture where employees feel seen, valued and motivated. Businesses that focus on employee retention and company culture tend to perform better and see stronger long term growth. Succeeding with Employee Retention If you’ve got a talented employee, it makes sense that you want them to keep working for your business. Hiring new employees involves significant costs in administration, training and productivity losses. Improving employee retention requires you to create a workplace environment where employees can feel satisfied, motivated and proud of their work. Company culture is a big influence on whether employees decide to stay and whether they continue to perform at a high level. Company Culture: What is it and why is it important? Company culture is the shared values, goals, attitudes within your business. It’s what your organisation believes in, how the employees feel about their work and where the team sees the company heading into the future. Fostering a positive company culture is critical for long term business success. Employees are more likely to keep working for a business when their personal values and attitudes align with the company culture, when they feel satisfied with their work and supported in their personal and career goals. A strong company culture can lead to: Improved employee satisfaction Greater loyalty Increased performance and productivity Better teamwork and collaboration 5 Strategies to start implementing 1. Touch base with your team regularly Being deliberate and creating time for open communication between yourself and your employees is crucial. Listen and respond to concerns they might have and make changes in the workplace to show them that they are heard and valued. 2. Be transparent and honest A policy of honesty will help everyone feel part of the team instead of excluded. Allow employees time to give feedback or share their opinions. Also make sure you give feedback as well and reinforce behaviours that will help grow a healthy company culture. 3. Give opportunities to grow Support your employees to achieve their personal career goals, whether that be through extra training and education, opportunities to support the community or pathways to promotion. Helping your team grow can help them feel more invested in your company. 4. Recognise hard work Everyone likes to feel seen and valued. Take time to show gratitude to your employees. They should be well rewarded for their work with salary and bonuses but also consider the extra value you offer them such as paid leave, catered lunches and wellness programs. 5. Encourage collaboration Get people to work together as a team and create opportunities for your employees to interact and get to know each other on a personal level. For example, team meals, excursions or team social get-togethers can help improve workplace relationships and team morale. Need tailored business advice? Chat with the team at Design Financial Advisory today on (08) 6263 9933

In order to sell more products or gain more clients, you need to understand how your target audience thinks and behaves. This is what behavioural economics is all about. It’s the study of consumer psychology and how it affects their purchasing decisions. Once you understand common patterns in consumer behaviour, you can find ways to increase your conversions and maximise your profits. Here are 7 valuable insights that behavioural economics gives us. Exclusivity & Scarcity By making a product, service or experience exclusive you increase desire for it. When something is rare, consumers tend to act with more impulsivity. Similarly, scarcity tactics like “sale ends today” and “only 4 spots left” can drive up a sense of urgency, encouraging customers to make action immediately. Rule of three If people are presented with two options, they will tend to go for the cheaper option. However, when you introduce a third, more expensive option they will tend to choose the middle option. For example, a mobile phone service provider could offer three packages: $40 / month for 40GB $70 / month for 80GB $110 / month for 120 GB The middle price point acts as an anchor – the third option is too expensive and the first option isn’t perceived as good value for money. Pricing like this will help drive customers to the second option. Reduce the number of choices Having a wide range of options to choose from sounds like a good thing, but it can end up backfiring. Presenting a potential customer with too many options can actually result in choice paralysis. When making a decision is too hard, people will often choose the easy way out – not buying anything. Consider reducing the number of options you offer to encourage more conversions. The Power of Suggestion A small suggestion or nudge can influence what and how much people buy. For example, when you offer group pricing like “3 items for $15” people will tend to buy 3. If you label one of your packages “best value”, you encourage more sales of that package. By using language like “luxury”, “deluxe” and “premium” you can influence the way customers perceive your product. “Free” “Free shipping”, “free gift with every purchase”, “buy 1 get 1 free” – using the word “free” is a highly effective way to attract potential customers. Often more so than a discount. Studies h ave shown that people tend to choose the free option even if a discounted option represents more savings or more value. Rewards Receiving gifts or rewards for making a purchase can help encourage customers to engage with your business again. Offering customers additional value is a good way to generate loyalty and drive up repeat sales. For example, you could offer loyalty cards or discounts to customers who have previously made a purchase in your store, encouraging them to buy from you again. Social Proof Before people invest in a product or service (particularly if it’s a high price point) they look to what others are saying and doing. In other words, you want to show potential customers that other people like what you offer. Ways to use social proof include positive reviews, customer testimonials, social shares, awards and credentials, celebrity endorsement and positive media stories. In addition to collecting positive reviews, it’s important that you act on bad reviews directly and swiftly. One bad review can outweigh a hundred good reviews, so it’s paramount that you handle them appropriately. Need advice about smarter business tactics? Get in touch wit h D e sign Financial Advisory today.