Winter 2012
Money Works Financial Planning Pty Ltd JUNE 2012
A Word From Chris... Super Contributions sional As the end of the financial Year approaches now is the time to start looking at your Superannuation and Taxation (if we need to pay more).
Inside This Issue: A Word
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From Chris Insights of
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Marketing Rule of
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Thirds The Smar-
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tline report Client Ap-
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preciation Night Liberty Saver
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contributions are come earners. Therefore if taxed at 15% and if your you are classified as a midmarginal tax rate is 15% i.e. you earn less than $37,000, then contributing to super as a concessional/tax de-
dle to low income earner you can take advantage by making eligible personal super contributions and the
ductable contribution is possibly not necessary. So firstly let’s look at Super- You may as well contribute annuation, more specifically after tax as a personal or how much we can contrib- member contribution. For
Government will then match up to $1000 a year.
contributing to a complying years. super fund or RSA Now for the all important co (Retirement Savings Ac-contribution, if you aren’t count). If you are an emalready utilising this contriployee or director of your bution type and you wish to own business the same apboost your super then start plies keeping in mind your to plan now! The Superan9% SGC and Super Guarnuation co-contribution is a antee Contributions all Government incentive to count towards your conceshelp eligible individuals sional cap however, you will boost their super accounts need to organise with your for the future. The coemployer to “Salary Sacricontribution incentive is difice”. Now, we have to keep rected at middle to low inin mind that all conces-
every dollar of your total income (less allowable expenses) in over $31,920.
The maximum entitlement is $1,000 which will in-
Personal Super ute for this financial year- personal after tax contribuContributions 2011/2012. For anyone un- tions, you can contribute up der 50 years of age, your to $150,000 P/A or (the Thresholds are up to 30 June 2012) concessional contributions $450,000 over a three year Lower Income $31,920 are capped at $25,000. For period. This means you can Threshold those of you who are self make a $450,000 contribuemployed you can contrib- tion into a complying super Higher Income $61,920 ute up to $25,000 for the fund or RSA but you cannot Threshold year to reduce your taxable make any further contribuincome, as long as you are tions for the period of three crease by 3.333 cents for
Hopefully this helps; it would be advisable to start looking at how much tax you may have to pay, and how much you wish to contribute to your super before the end of the financial year. Don’t wait until the end of June, it maybe too late!
Money Works Financial Planning Pty Ltd
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Insights in Marketing for the Business Professional Hi my name is Paul McCarthy, I am a core marketer. I think marketing, talk marketing and most importantly, I do marketing – all the time. My hope for you is you will learn to do the same. One of the skills that you’ll need to develop if you are to become an effective marketer is the art of Direct Response Marketing.
must be about your read - not you. 2. As the name suggests, this is a DIRECT RESPONSE AD. That means it needs to evoke an immediate response, action, visit, call, or purchasing decision. 3. A good Direct Response Ad not only tells people why they need it, importantly it is designed to overcome all the major sales objections In the past you may have particiyour prospect might have about pated in a process to advertise your purchasing. business in the newspaper, an in4. The focus on the Ad is on the dustry magazine or a publication of benefits your product or service ofsome type. You may, like many of fers, never on the features. Rethe entrepreneurs I meet, have member, no one cares how it works found that it produced very little re- - they only care about what it does sult. The likelihood is the problem for them. was not with the media you chose, 5. The Ad should offer proof of outbut rather the message that was standing performance or results. communicated. So let me layout a 7 The best way to do this is to use point checklist to make sure next testimonials from satisfied customtime you decide to promote your ers about the outcomes they experibusiness, you create a Direct Reenced. sponse Ad. 6. It should offer the most powerful guarantee you can make; clearly a 1. It is essential that you have a money-back guarantee is the best. compelling headline – DO NOT use By offering a bulletproof guarantee this space to put the name of your you create risk reversal for your business EVER. Your headline
prospect. 7. Finally, make sure it has your contact information on the Ad. You must tell people how you want them to respond. You’d be surprised how many people forget this last step. Most ads I see are not direct response; they are little more than a business card telling people who you are, where you are and what you do. This rank, file and serial number approach doesn’t work and you may have already experienced that reality. If you want people to take action and buy what you sell, then you better make sure you write your ads to them, about them and help them to choose you. Committed To Accelerating Your Business Success,
Paul McCarthy
Rule of Thirds Keith Abraham’s Blog place a subject in your frame. So what has this all got to do with pursuing your passion, you may ask?
Image from learnasicphotography.blogspot.com.au
In photography there is technique called a Rule of Thirds. You look at a picture and divide it into 3 parts horizontally … bottom; middle; top and then 3 parts vertically … left; centre; right. Where these lines intersect is an ideal spot to
Your goals can be divided into the Rule of Thirds also … The Start; The Middle; The Finish. You will need to navigate a number of different intersections as you pursue your goals. You see, when you set your goals you will come to some intersections … Should I go this way or this way? Should I continue on the same pathway? What started off easy has now gotten a little harder as you get closer to your goal.
At the START, your goal is exciting, it is easy to see progress and you feel energised. In the MIDDLE when no one is watching or cheering you on, it can be tough. Lots of people give up here, they realise effort is required, not just intentions. Then towards the FINISH, you start to capitalise on your momentum. Roadblocks become speed bumps and challenges become the signposts that you are on the right track. The great part about the Rule of Thirds, is that you only have to focus on the START. What do you need to start today?
The Smartline Report- RBA Rates Decision The Reserve Bank acted decisively following the 1 May Board meeting by reducing the official cash rate by 0.5% to 3.75%. The size of the cut was regarded as surprising by the market. Expectations were high that the Reserve Bank would cut the rate by 0.25% especially given the comments made after the April Board meeting that indicated that if the first quarter inflation numbers (released in late April) remained low there was room to ease monetary policy if warranted. This was widely interpreted in the market that the central bank was close to lowering rates but just wanted to sight the latest inflation data before acting. The step away from the usual 0.25% adjustment was not so widely anticipated. In hindsight though the decision makes sense. So why did the Bank move by 0.5%?
Reserve
The answer lies in the shift in approach. The Reserve Bank has for some months now referred to the level of lending rates in the market (especially the very publicly sensi-
tive home mortgage rate) as the key factor, not purely the level of the cash rate itself. The Reserve Bank has recognised that the nexus between the cash rate and lending rates has been broken due to the major shift in funding costs for banks that are no longer strongly correlated to the official rate.
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funding exposure in order to build stronger, more liquid balance sheets which in turn would guard against any future market shocks. Now, since the Reserve Bank last eased the cash rate in December, the costs of funds pressure on banks brought about increases in lending rates in the market during February. Further, in the lead up to the May meeting, market speculation that banks would need to repeat this adjustment and again raise lending rates, or not pass on the full amount of any potential Reserve Bank easing, was high. So in this context and with a strong predilection to target lending rates as opposed to the cash rate itself, the Reserve Bank saw a need to move the official cash rate by a larger amount. By doing this, and after taking into account the prospect of the cash rate change not being fully passed on to borrowers via lending rates, the net outcome would still produce a desired level of monetary stimulus to the economy.
Wholesale market funding costs have risen sharply over recent years and remained high, the result of concerns regarding banks emanating from the global financial crisis and the subsequent European debt crisis. Interest rates on deposits have risen sharply also and increased as a proportion of bank funding, a direct response to high wholesale market costs and attempts to reduce reliance on that source. Term deposits in particular have become an interest rate battleground with margins above the official cash rate moving significantly above historic averages. These changes in funding behaviors and costs have also been stimulated by regulatory change as banks are being encouraged to access more ‘Economic update following the RBA's term funding and reduce short term May decision on rates’ Glenn Baker, CFO ING Directt April 4, 2012
Money Works Client Appreciation Night Money Works is hosting a Client Appreciation Night on Wednesday the 13th of June to thank our clients and business associates for their continued support throughout the year. The evening will kick off at 6:00pm for drinks and nibbles with the movie (The Way) to start shortly after.
de Santiago. (St. Anthony Messenger).
The movie we are presenting, ‘The Way’ stars Martin Sheen who plays an American doctor and widower called to France to recover the body of his adult son (director Emilio Estevez) who was accidentally killed by a snowstorm in the Pyrenees while hiking the Camino
Seats are limited so please RSVP as soon as possible, but no later than Wednesday the 6th of June (either yes or no), advising the number of guests that will be attending.
“The Way is really a gift from this son to his father. Sheen, gradually revealing a man painfully getting reacquainted with long buried feelings, who gives the film its bruised heart.” (The Rolling Stone)
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