Do you want to get on the property ladder?
Taking time out to focus on your bigger life goals, such as buying a home or investment property, is an important step to securing your financial future
Buying a house is a big decision so it makes sense to get some help along the way. There are lots of questions to answer - where to buy, what sort of property, when is the best time?
It's also important to have a clear picture of your financial situation before you start as this way you can set clear goals around the amount you can afford to pay for your property and the level of debt you want to take on
Before you start to look for the best home loan and interest rates, there are some key questions you should consider
- What size mortgage can you afford?
- Do you have enough deposit?
- Will your income be enough to cover mortgage repayments and allow you to live the lifestyle you want to?
- What would happen if you couldn't work for a period of time?
- How often should you pay your mortgage payments - weekly, fortnightly or monthly?
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Would you like to start building your wealth more quickly?
If you're in a position where you have some disposable income at the end of each month, there are things you can do to make the most of it.
So how do you get your money to work harder for you?
Could you be getting better returns from your money?
You may already have some money saved in term deposits or other savings accounts, but to grow your wealth over the longer terms it's worth thinking about investing in growth assets, like shares. Making regular contributions to your investments will also mean you can build your wealth more quickly.
If you're comfortable with the idea that you can earn greater rewards by taking on more risk, now may be the time to invest more aggressively
A managed fund is a great way to build your investment portfolio. You can invest in a range of investments that have been selected for you by expert managers. You get a diversified portfolio and you can choose a fund with an investment strategy that suits your needs. A managed fund also allows you to access opportunities you wouldn't be able to invest in as an individual.
Setting up a regular investment plan for your managed fund is easy, plus you can choose to reinvest your investment earnings helping to build your wealth more quickly.
Also borrowing to invest enables you to invest more money than you could on your own and with more money to invest you have the potential for greater returns. A margin loan is a tax effective way to invest because the interest you pay on your loan is generally tax deductible. You don't need to borrow large sums of money, you can start small and invest regularly to build up your investment portfolio over time.
It is important to remember that borrowing to invest can increase losses as well as your gains so getting quality advice is a must.
If you've recently finished university and started working full time, you may be thinking about travel, buying your own car or even your first home.
Making your first large purchase can be exciting, but you're probably also asking yourself - can I afford it? How can you save and enjoy your lifestyle at the same time.
If you're saving for a large purchase, it's important to set yourself a goal. Work out how much you need to save and when you want to make the purchase.
The next step is to go through your budget and see where you can cut back since small changes can make all the difference. Once you've worked out how much you can afford to save, set up a regular savings plan to achieve your set goal. You can then consider other options to grow your money, like term deposits.
Is your portfolio diversified?
When you first start building an investment portfolio it can be difficult to diversify across different asset classes because you may only have one or two investments in your portfolio but as your portfolio grows, diversification becomes easier and also more important.
The key to achieving long term growth in your investment portfolio and reducing your overall risk is to diversify.
By diversifying the investments in your portfolio, you're effectively spreading your risk. You give yourself the opportunity to benefit from a range of investments that may perform differently in different market cycles.
You can diversify your portfolio at many levels across asset classes, sectors and investment manager. Diversifying across asset classes can be particularly effective especially when sharemarkets are volatile
Diversifying also means you don't have to try and guess what the best performing asset class is going to be. If you "chase" returns each year and invest in the best performing asset class from the previous year, you may end up worse off than if you stayed invested in a balanced portfolio.
There are a number of investment solutions to help you achieve your goals, including:
- multi-manager funds
- single manager funds
- separately managed accounts (SMAs)
- direct shares
- other listed investments - listed companies (LICs), exchange traded funds (ETFs) and instalment warrants