As parents, we all dream about leaving a legacy for our children. Whether that’s in the form of passing on the family home, or another valuable asset, we typically want them to get a head start in life.

Some people take a different approach to leaving a legacy though.

While life insurance is a vital part of a robust financial plan, some women hold onto it much longer than is necessary. Their children may have left home (no longer financially dependent). Yet they hold onto their life insurance so they can leave the proceeds to their children. However, this may not necessarily be the most effective approach.

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The sharing economy has taken off over the past few years, giving people new ways to earn an additional income.

Have a car and some spare time? Drive an Uber. Possess a unique skill and have some extra time? Perform tasks as an AirTasker. Vacant property collecting dust? Rent it out on AirBNB.

In fact, AirBNB is one of the most popular ways to generate additional income in the sharing economy, with spare rooms and holiday homes being put to use.

Before you list your property on AirBNB, here are so pro’s and con’s that you should be aware of.

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The Little-Known Super Tax That Could Cost You Thousands… And What To Do To Avoid It

The superannuation system in Australia can be quite complex. To make things worse, politicians like to tinker with the system, which keeps us on our toes. The unfortunate thing about this is that for the average Australian it can become quite challenging to stay up to date with the rules, regulations, and taxes.

One tax that you need to be aware of though is death benefit tax.

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If you are a business owner, here are a few considerations you need to be aware of.

Your Business Is Only As Valuable As Someone Is Willing To Pay

If you’re planning on selling your business to fund your retirement, you need to remember that any asset is only as valuable as someone is willing to pay for it. Your business may be going well now and it may even see it’s value increasing over time, however, it doesn’t take much for an industry to be disrupted and for business values to plummet.

Think about taxis. A few years ago, a taxi licence in Queensland could be sold for $530,000. Then along came Uber. Now, they are valued less than $150,000.

Imagine if this happened to your industry.

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Many people will say that they are dreaming of retirement, but some are not taking the necessary action to make it a reality. In fact, there are not too many people who know the answer to a straightforward question: How much income do you need in retirement?

Let’s take a look at what the Association of Superannuation Funds of Australia (sometimes known as ASFA) thinks is a reasonable amount to live on in retirement and compare it with my own experience as an adviser. I’ve worked with many people who are planning for retirement and you may be surprised to see how different my number is to ASFA’s…

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If you had to ask married couples what causes the most friction in their relationship, finances would be at the top of the list. Some people may have been financially abused in previous relationships, while others have been taught by their parents to keep things separate. Despite this, there are some concepts around handling your money in a relationship that you should know so that you can effectively run your household.

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When it comes to planning for your retirement, you need to start when you’re young. That’s why it’s called investing for retirement – it’s something that you work for years to achieve before you reap the benefits. However, there are two questions that commonly arise:

1.    When should you start planning for retirement?

2.    How much do you need for retirement?

When Do You Start?

The simple answer is: as soon as possible. When you start earning a salary, it’s recommended that you start putting money away immediately. Remember the story about the tortoise and the hare? The tortoise beat the hare in a race because the hare did nothing and relaxed for hours. Meanwhile, the tortoise made slow and steady progress – and won the race. If you spend too much time putting your retirement savings off, it might be too late when you start.

How Much Do You Need?

Answering the question of how much you need for retirement requires you to do some calculations. First, ask yourself what standard of living you expect. Do you want to move to a smaller home? Will you want to travel abroad once a year, or do you want to be able to visit your kids in another state over Christmas and for their birthdays?

Next, estimate your expenses during retirement. Remember to factor out certain expenses that won’t be relevant by that time – for example, will your mortgage be paid for? Will you be living somewhere more affordable? If you’re paying school tuition now, you won’t have to factor in that expense at a later stage.

Your expenses should include enough money to maintain your home, health insurance and medication, travel expenses, basic living necessities such as clothing and food, utility bills, hobbies, and entertainment. You can calculate it annually, to give you a lump sum of how much you need for retirement per year, or monthly if that’s easier for you. Lastly, add inflation costs to your calculations.

Investing for your retirement might be a pain in the neck now, but you’ll be happy to have put in the effort when you’re living out your dream lifestyle. Start as soon as possible, calculate realistic expenses and remember, be the tortoise!

Despite interest rates being low, debt stress is at record highs. Banking data shows that on average Principal and Interest repayments currently take up 42% of household income. As a result, banks are becoming concerned about what will happen when rates start to rise?

Increasing pressure from APRA and the Royal Commission, have made the ability to refinance loans considerably harder. Clients that have never had an issue obtaining a  loan in the past are being heavily scrutinised and even having their applications declined.

Banks appetite for Interest Only loans have also decreased significantly. Many clients are finding that when they try to extend their Interest Only (I/O) term, that the banks are not accepting their request. If you have an investment property, paying principal and Interest (P&I) payments can have a significant impact on your cashflow and wealth strategies.

To make things worse, most banks have also changed the way they assess applicants ability to afford the loan (Serviceability). Instead of relying on an average living expense formula for couples and families, they are now wanting to see your personal bank statement transactions and a accurate budget.

If you’re like most people, you spend pretty much what comes in and your budget is set based on your bank balance. If interest rates went up you would just adjust your spending. Unfortunately, this type of budgeting is going to make it very tough when you apply for that next loan.

What can you do to prepare?

To ensure a smooth transition to Principal & Interest Repayments or rollover to another Interest Only period the following tips might help;

  • Make a budget that proves you can afford P&I repayments with a 2% interest rate rise. Make sure its comprehensive, and don’t forget to include things like your drivers licence renewals and an amount for when your fridge blows or when you need to replace furniture. You might not need it this year, but next year you might.
  • Stick to the budget. The banks review 6 months of transactions and if you broke the budget, they will know. An easy way to do this is by opening separate bank accounts for your discretionary spending.  For example, Groceries, Gifts, leisure / entertainment, children, etc.
  • Don’t leave it to the last minute to renew your Interest Only term. Speak to your broker or your bank, at least 3-6 months before the Interest Only term finishes. This will ensure that you have time to review your options and adjust your budget before you need to apply. It will also give you time to sell if affordability is an issue.
  • If you do have to change to P&I, review the viability of your investment strategy. It may no longer be the best option, especially if you still have debt on your principal residence.


Puddle 2 Pond Financial is a Financial planner Nowra and has been in operation since 2012. We see clients at our office in Nowra and provide a mobile service in the Illawarra and Wollongong region. We specialise in helping clients with budgeting and implementing strategies so they stick to it. If you’re a little overwhelmed and would love some help, give us a call on 02 4424 0479 …. We’d love to help. 

Are you earning a respectable income and want more to show for it?

Do you want to feel more confident about what the future has in store for you?

Is 2018 the year that you’re prepared to do something about it?

If you answered yes to any of these questions, then getting a seat at our next Financial Bootcamp workshop is a must.

We will show you

  • The importance of understanding what you personally want to achieve in life and how shifting your mindset towards achieving it will impact on your success.
  • How different influences in your past can impact on your relationship with money today
  • Key principles that will allow you to manage your budget, pay off your debt and build solid financial foundations to set you on the path to achieving your dreams.

Event detail

Date: Thursday 15th February 2018

Time: 5.45pm-8pm

Location: Nowra Golf Club

Cost: Completely free. No sales pitch, and there is nothing at all to purchase. We run this workshop because at Puddle 2 Pond Financial we have a passion to help as many people as possible avoid the mistakes and educate them for the best chance of financial success.

Bookings: https://www.eventbrite.com.au/o/puddle-2-pond-financial-pty-limited-13346502082

Includes drinks and nibbles

This is no ordinary finance workshop. So don’t miss out.



Government changes to the pension asset test are likely to impact the entitlements of some pensioners. These changes come into effect from 1 January 2017 and will apply to age pensioners as well as those in receipt of Disability Support Pension, Carers Payment and Service Pension.

Assets test thresholds will change

The table below shows the new asset test thresholds that will be effective from 1 January 2017.

                                                           Asset threshold full pension           Asset threshold part pension 
                                                             Current         1 Jan 2017                        Current           1 Jan 2017
Single – Homeowner                           $209,000      $250,000                            $793,750           $542,500
Single – Non Homeowner                   $360,500      $450,000                            $945,250           $742,500
Couple – Homeowner                         $296,500      $375,000                            $1,178,500        $816,000
Couple – Non Homeowner                 $448,000      $575,000                            $1,330,000        $1,016,000

The lower assets test threshold is the amount of assessable assets pensioners can hold before pension entitlement begins to reduce under the assets test. Once assessable assets exceed the higher threshold, pension entitlement will be nil.

Taper rate to increase

From 1 January 2017, the maximum payment a pensioner can receive will be reduced by $3.00 per fortnight for every $1,000 of assets they hold above the asset test threshold for full pension. This is an increase from the current taper rate of $1.50 per fortnight for each $1,000 of excess assets.

How your pension may be affected

The changes to the asset test thresholds will broadly mean:

  • Pensioners with assessable assets below or ‘around’ the lower threshold are likely to maintain their current level of pension or potentially see an increase in their pension entitlement.
  • Pensioners with assessable assets above the lower threshold are likely to see a reduction in their pension entitlements – in some cases to nil – as a result of the increased taper rate.

We’re here to help

If you want to know more about how the new changes may affect your pension entitlements or explore strategies to help reduce the impact of the changes, please contact me on 02 4424 0479.


Alternatively come along to our Seminar where we will explain the changes and share some tips we use to maximise your Centrelink entitlements.

When: Thursday 10th November

Time: 10am – 11.20am

Where: Bomaderry Bowling Club

Included: Morning Tea (light refreshments, Tea / Coffee)

Speakers: Amanda Pond -Puddle 2 Pond Financial & Paris Kritikos: – Challenger Limited

RSVP: Tuesday 8th November

Contact our office on 02 4424 0479 to reserve your place.

This website contains general information only. It does not take into account your objectives, financial situation or needs. Please consider the appropriateness of the information in light of your personal circumstances.

Puddle 2 Pond Financial Pty Limited, ABN 14 159 325 603, is an Authorised Representative and Credit Representative of AMP Financial Planning Pty Limited, Australian Financial Services Licensee and Australian Credit Licensee.

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