(Feedsy Exclusive)

Why Time Is Wealth

If you were to choose between money and time, which option would you go for?

For some, the answer is easy: it’s money. The reason, of course, is that people measure one’s level of success and wealth by the size of one’s bank account, number of properties, investments and other assets.

Children grow up thinking that to be happy, they need to live in a mansion, own several expensive automobiles and have a fat bank account — or that having money (lots of it) is the key to happiness. This way of thinking puts a tremendous amount of stress on people who then end up second-guessing the choices they make in life.

If, say, you chose to be a small-time vegetable farmer rather than the high-powered corporate lawyer your parents wanted you to be, would you consider yourself successful? Perhaps not in the eyes of a society where more money means success.

The problem with chasing money

Wanting to be financially independent is a good thing. Setting out to achieve financial security by saving, getting insurance, investing and working extra is a practical and desirable goal.

The problem lies in how some people get too caught up in the idea of chasing money. Instead of working to live, they end up living to work. They spend day after day, week after week, and then months and years accumulating money, hoping someday they’ll have the time to enjoy the fruits of their labour.

But then, how much money is enough?

People find themselves so engrossed in their never-ending quest for more money that they end up sacrificing their precious time. Then, before they know it, they realise that the person they see when they look in the mirror is an old man or woman who spent their best years accumulating material wealth.

Shifting the attention from material wealth to time wealth

The term “time wealth” or “time affluence” refers to a person’s ability to spend time on things or activities that matter to them or give them personal satisfaction. But who is really rich: the one who possesses time wealth or the one who has amassed material wealth?

There’s a famous adage that says “time is gold,” and it still rings true today. When people are working, they are literally using time and energy to generate money through the salary or income they receive. In a larger sense, as long as one has time, the opportunity to build or accumulate wealth remains.

But when all one has is money, one can’t even use it to buy time. This is especially true for people who forget to take care of themselves and their relationships in their desire to become rich. They end up alone, get sick or die because of their relentless pursuit of money.

Smartly spend your time wealth

For a period in your life, time spent accumulating material wealth may seem worthwhile. However, you can make better use of your time on things that’ll satisfy you personally rather than financially.

Remember your lifelong dreams and your relationships?

Make time for them and nurture them. They’re the reason you started making money in the first place.

And with everything you know about finance, you can afford to pause from work and focus on living — really living.

But if you need wealth advice or tips to help you make better financial decisions suitable for your unique situation, get in touch with a professional financial adviser.

If this article has inspired you to think about your own unique situation and, more importantly, what you and your family are going through right now, please contact your advice professional.

This information does not take into account the objectives, financial situation or needs of any person. Before making a decision, you should consider whether it is appropriate in light of your particular objectives, financial situation or needs.

Feedsy Exclusiv

For some people, a major reason for beginning to prepare for life’s ‘what if’ scenarios is starting a family.

If your primary concern is taking care of your family, life insurance is an excellent option. It makes sure that your loved ones are supported financially, both now and in the future, as they cope with financial burdens that may come in case the unfortunate happens.

Check out the benefits of life insurance and some of your options if you’re thinking about getting it to give your family financial security.

Life insurance benefits

In general, a life insurance is designed to provide protection to beneficiaries in the event the policyholder dies or becomes incapacitated.

It offers a lump-sum cash payout to the beneficiaries you designate if you suffer from a terminal illness or pass away.

To be specific, life insurance provides the following benefits:

• It can give you peace of mind. By providing for your family in case of your death, disability or permanent injury or a serious illness, you’ll have more confidence knowing they’ll be financially secure no matter what happens.
• It can reduce the financial burden of a terminal illness. If you become seriously ill and rack up hospital and doctors’ bills, you can receive a payout, which can reduce your financial worries. However, to enjoy this benefit, you need to make sure your policy provides for this benefit.
• It is flexible enough to cover a range of situations and life stages. There are a variety of policies offered by providers to cover different professions and life stages. Most of them also allow for a range of benefits that policyholders can choose from.

Types of life insurance cover

Depending on your needs and priorities, you may opt for the following types of life insurance.

• Accident-only income protection: If you’re hurt in an accident and cannot work for longer than the waiting period, this insurance will pay you a monthly benefit of up to 70% of your average income.
• Funeral cover:This provides a cash payout that can be used to pay for the final costs of a loved one’s funeral expenses.
• Income protection: This typically provides a monthly payout equal to up to 70% of your regular income if you’re temporarily unable to work because of illness or injury.
• Term life: Although this form of policy offers a lump sum payment, it can also work as a salary replacement, so your family can continue living in the manner they’re accustomed to. They can also use it to pay off your obligations.
• Total and permanent disability (TPD): If you suffer a total or permanent disability because of a sickness or injury and cannot work, this type of insurance provides a lump sum payment to replace lost income, help with medical costs, and pay for recurring debts and bills.
• Trauma:This provides a lump-sum payment if you experience one of the serious ailments detailed in your policy. Depending on what’s covered, it can provide financial cushion if you experience a heart attack, cancer diagnosis, or stroke.

Unlike savings, life insurance provides your family with financial security immediately.

So, even if you’re saving and investing, consider getting a suitable life insurance policy today to ensure your family’s financial stability in the event of you becoming terminally ill, physically incapacitated, or passing.

If this article has inspired you to think about your own unique situation and, more importantly, what you and your family are going through right now, please contact your advice professional.

(Feedsy Exclusive)

In today’s economic climate, it’s increasingly common to help your child with their first home.

In this article, we’re going to look at three options to help you do this.

Why not take a look at the pros and cons of each and choose the one that’s the best fit for you?

1. With a cash gift

A lump sum of cash is a great way to raise the deposit for a first home, but there are a few things to consider.

Lenders may require the gift to be in your child’s bank account for a period of time. Typically this could be between three and six months, so you’ll need to plan ahead.

The lender will also need to know that your child can keep up with the repayments, which usually means that they are employed (or self-employed) with a certain level of income.

And you should accept that your cash gift is exactly that — you may need to sign a declaration to say you don’t expect it back.

You should also consider what happens if your child buys with a partner and they split up — the partner could end up with a share of a house that you’ve helped to fund.

2. Buying in partnership

Buying a property in partnership with your child and owning it together is another popular option.

There are various ways of doing this — you can own the property in different proportions, and your share could pass to your child or another party in your will, or you could own it 50/50 with a clause that means your share automatically passes to your child, regardless of your will.

Be sure to get legal advice for this option and agree on ground rules before you go ahead.

3. Using your home as a guarantor

Instead of cash, you can use the equity in your own property as security. This is known as a guarantor loan and means your child won’t have to raise a deposit.

You can limit the scope of the loan by setting it as a certain proportion of the property’s value, for example, 20%. This means you can be released once the property rises in value or your child pays off that proportion of the loan.

Know that you may not be accepted if you are retired or are still paying off your own mortgage. And your child will need to prove that they can afford their mortgage repayments.

Helping your child with their first home is a valuable gift. Choose how you do this wisely, and you will be helping to get your child off to a secure start in their adult life.

If this article has inspired you to think about your own unique situation and, importantly, what you and your family are going through right now, please contact your advice professional.

The significance of choosing the appropriate structure to make the protection and maintenance of your assets possible cannot be overstated. This is necessary regardless of whether you have acquired your fortune on your own or through inheritance.

In this instance, you may want to consider estate and succession planning to protect your assets and ensure some tax benefits for the beneficiaries of your estate.

One of the most effective estate planning strategies today is the use of a testamentary trust in a will.

When your estate is distributed to your beneficiaries, a testamentary trust can help with minimising capital gains tax, stamp duty, and other taxes that may be due. It can also help protect your assets from creditors, unscrupulous individuals, and the like.

Testamentary trusts—the basics

A testamentary trust (aka will trust) is, in simple terms, a trust that’s created according to the terms set in a will. It typically takes take the form of a discretionary trust.

However, unlike inter vivos (facilitated or done between living persons) discretionary trusts, which allow for the transfer of assets and gifts while the grantor is still alive, testamentary trusts are only activated after the grantor’s demise.

Each beneficiary under your will may have a testamentary trust that is most appropriate to their circumstances. There are different sorts of testamentary trusts that can be established, such as:

• Beneficiary-controlled testamentary trust
• Capital-reserved testamentary trust
• Protective testamentary trust

Benefits of testamentary trusts

Compared to typical wills, a testamentary trust offers the grantor more discretion over estate planning and distribution to beneficiaries.

Among the key benefits of testamentary trusts are:

• Flexibility: A testamentary trust functions in a similar way to a discretionary family trust. A trustee may choose which beneficiaries get trust income as long as they are nominated in the trust. With this freedom, the trustee can choose to distribute income, capital and dividends in the most tax-efficient way. Also, in the event that superannuation funds are paid to the estate, trustees will have plenty of discretion in how to handle them.
• Asset protection from third parties: Testamentary trusts can shield assets from possible court cases, bankruptcies, and legal actions because the trustee has the title to the trust assets (not the beneficiaries directly). A testamentary trust can offer you extra asset protection if your surviving spouse or your adult child runs a business that carries a large financial risk. For adult children, it might offer family law protection as well.
• Tax advantages: Testamentary trusts give trustees the option to divide and distribute the trust’s income for tax planning purposes. Also, distributions from a testamentary trust will be tax-free up to the standard full exemption amount. Beneficiaries who have children aged below 18 can significantly profit from this tax planning benefit because they can use pre-tax income to pay for their children’s expenses. Moreover, any capital gain made by the executor (the person chosen to carry out the will) is disregarded by law when a capital gains tax asset is transferred from the executor to a beneficiary.

So, is a testamentary trust for you?

When it comes to estate and succession planning, it’s always better to get the input of your financial advisor and a solicitor specialising in wills and trusts.

If this article has inspired you to think about your own unique situation and, more importantly, what you and your family are going through right now, please contact your advice professional.

Dominic Giannini
(Australian Associated Press)

Age pensioners will be able to pick up extra shifts and earn some extra cash before Christmas without losing their benefits.

New laws increase the amount they can earn by $4000 to $11,800 from December 1 until the end of 2023 before their pension starts to taper.

It will benefit more than 50,000 pensioners in the workforce.

The new laws also scrap the need to reapply for their payment for up to two years if they exceed the income limit.

The pension is currently cut off after the income limit is exceeded for three months.

Social Services Minister Amanda Rishworth said the changes would help address crippling workforce shortages.

“Older workers are an untapped market, having years of knowledge and skills to offer employers,” she said.

“Giving older Australians the choice to engage in the workforce will not only benefit them, it is also an important step towards addressing Australia’s labour shortages.”

Age pensioners will be able to pick up extra shifts and earn some extra cash before Christmas without losing their benefits.

New laws increase the amount they can earn by $4000 to $11,800 from December 1 until the end of 2023 before their pension starts to taper.

It will benefit more than 50,000 pensioners in the workforce.

The new laws also scrap the need to reapply for their payment for up to two years if they exceed the income limit.

The pension is currently cut off after the income limit is exceeded for three months.

Social Services Minister Amanda Rishworth said the changes would help address crippling workforce shortages.

“Older workers are an untapped market, having years of knowledge and skills to offer employers,” she said.

“Giving older Australians the choice to engage in the workforce will not only benefit them, it is also an important step towards addressing Australia’s labour shortages.”