Category Archives: Blog

How to Choose the Right Personal Insurance

While many Australians have insurance, the fact is that they are underinsured. Many Australians families would not be able to meet financial obligations if the primary income earner loses a job, falls ill, or suffers an accident. Personal insurance provides you and your loved ones with peace of mind if an unexpected event occurs. There are many different options for personal insurance, so here are some tips on how to choose the right personal insurance.

What type of insurance do I need?

There are four types of personal insurance:

  • Income protection – income protection insurance will provide you with an income to help with your living expenses if you are unable to work for a period of time.
  • Total and permanent disablement (TPD) – if you are unable to work again, TPD insurance cover will provide you with a lump sum payment to help support you.
  • Trauma cover – trauma insurance will pay you a lump sum should you contract or suffer from a critical condition such as cancer, heart attacks or strokes.
  • Life insurance – life insurance will provide a lump sum to your beneficiaries if you pass away.

How much should my cover be?

The amount of insurance you need will vary depending on your circumstances. You need to work out how much money your family would need to pay debts, bills and living expenses. A study by Rice Warner suggests that your life insurance should be around eight times your income and TPD should be around four times your income. The study recommends income protection be about 85% of your income.

Where should I purchase personal insurance?

You can purchase personal insurance through insurance companies. Many superannuation funds also offer insurance for their members, and usually offer income protection, TPD and life insurance policies. There are benefits to getting covered through your superannuation fund, as it is often cheaper, easy to manage, and you can typically choose the amount you want to be covered for. Be aware though, as superannuation funds typically only cover you until you are 65, your cover may cease if your account is inactive and if you have multiple super accounts, like many Australians, you might find yourself paying premiums on numerous policies.

When purchasing personal insurance, you need to make sure you understand the events/illnesses covered by your insurance, the level of cover, ongoing costs, your medical history, and any exclusions from the policy. Our certified financial planners can walk you through the process and help you choose the best personal insurance for your needs.

5 Steps for Successful Succession Planning

Have you thought about the future of your business? Succession planning is often overlooked, even though it is so vital to the future and the inevitable changes that will come. It should be a routine process within a business to identify and develop future leaders. Whether you have a family business, small business, or large organisation, here are five steps for successful succession planning.

1. Keep an open mind

The key to successful succession planning is to keep an open mind. Many companies struggle with succession planning because they assume that the highest performing employees will be the best fit for leadership roles, which is not always the case. It’s essential to be flexible, as circumstances can change rapidly, and business priorities can shift.

2. Start the process early

Starting the process early goes hand in hand with keeping an open mind. If you fail to identify potential candidates soon enough, they will not have enough opportunity to develop their leadership potential. Take active steps to identify employees who demonstrate the desire to take on leadership roles.

3. Share your vision

You need to share the businesses long-term goals and vision with potential successors. Doing this will help them to develop their leadership skills to suit the vision of the organisation. It’s important to share this vision with human resources and senior leadership to increase employee retention and grow trust and loyalty with staff.

4. Offer feedback

People can’t grow and develop themselves without feedback and constructive criticism. Make a note of an employee’s achievements, so you have their information available when positions become available.

5. Provide training for employees

When you successfully identify potential leaders, you should provide them with training opportunities to help them grow. For example, you can offer mentors or have employees move laterally throughout the organisation to broaden their skills, knowledge and relationships. Focus on expanding an employee’s abilities, instead of just on their linear career track. Many organisations choose to test out these new skills while senior staff are on leave by stretching their responsibilities to see how well prepared they are to take on a more significant role in the organisation.

Creating a succession plan shouldn’t be a scary process. At The Farm Protectors, we think of succession planning as Business Evolution. We know that succession plans come in all shapes and sizes and can be incredibly complex. Get in touch today to develop your succession plan to create a prosperous future for your business.

Working More Isn’t Always the Answer to Your Financial Struggles

Many people just assume that the best way to fix their financial problems is to work more. They never stop to consider that this could have a negative impact on their finances, personal life and wellbeing.

Here’s why working more may not be the answer to your financial struggles.

You’ll spend more money

When you are working more hours, you have a lot less time to look after the other aspects of your life. Combine this with the exhaustion you will probably feel with increased work, and you will probably end up spending more money for convenience. You will have less time to plan and shop, resulting in increased expenses towards food, coffees, cleaners, and taxis to get you home after the long day at work. You will need to have a strict budget in place otherwise you’ll notice an increase in those every day, small purchases that add up over time.

You’ll miss out on life

What’s the point in working more to purchase that new home, if you never spend any time in it? By increasing your work hours, you miss out on spending time with family and friends, which is a very high priority for some people. You need to ask yourself if missing these moments is worth the extra money you would be making.

You’ll still be chasing the next best thing

With an increase in income, you can buy the next best thing, like a new car or television. But as your income continues to grow, so will your desire for the next best thing. There will always be another item that you think will make you happier and will have you wanting to spend that hard-earned money.

Unfortunately, money doesn’t solve everything. There are things that money cannot buy. Instead of jumping into more work, it is worthwhile looking at your priorities and determining a budget that suits. If you are struggling to manage your finances and meet your financial goals, you should seek the help of a licensed professional. Get in contact with The Farm Protectors today to help you structure your finances to fit you, without having to sacrifice your lifestyle.

4 Reasons to Save for Retirement

Saving for retirement might not seem like a priority for you. While your employer is required by law to make contributions to your superannuation fund, it is worthwhile looking into creating your savings for retirement so that you can live comfortably. It’s worth making your retirement a priority. Here are 4 reasons to start saving for your retirement now.

We’re living longer

According to the Australian Bureau of Statistics, Australian’s are living longer and therefore have longer retirements. This is in part due to improved health services, safer working environments, and technological advances. However, this means that a lot of Australians are outliving their retirement savings as they underestimate how much money they will need for a comfortable retirement.

You cannot predict the future

You never know what is going to happen in life, so it’s always a good idea to have as much money saved as you can. When planning for retirement, you are making predictions about your health, living situation and support from the people around you. Adding to your emergency fund for retirement can help you if your circumstances change, for example becoming ill or needing to make emergency repairs to your property. This will allow you to make choices in your situation, and not be too stressed out about your financial situation.

Save at tax time

Did you know that each financial year you can add up to $25,000 of your earnings as before-tax contributions into your superannuation fund? This means that you will only have to pay 15% tax on this income saved into your superannuation fund up to $25,000. However, it is important to note that this amount includes contributions that your employer makes.

Take advantage of compounding

The sooner you start saving for retirement, the better off you will be because of compounding interest. Your money will earn interest, and the amount of interest you earn each period will continue to grow as you earn interest. Essentially, your interest is earning interest.

These are just some of the reasons that you should start saving for your retirement. It’s never too late to start, and with the help of the team at The Farm Protectors, you can set goals for your retirement and get your savings on track for your future.

Avoid These Top Financial Regrets

As you get older, you realise that mistakes are unavoidable. Many people have regrets about financial decisions that they made earlier in life, wondering just how different their lives could be if they had made better decisions with their money.

With the help of the team at The Farm Protectors, you can avoid these top financial regrets and set yourself up for life.

Not saving enough money

One of the most common regrets people have later in life is not saving enough money. Many people especially wish that they had saved more during their twenties and thirties to help grow their money into the future. Sticking to a budget should be top of the list when you are striving to set yourself up for the future.

Not investing

Many Australians fail to invest their money wisely, or even at all, throughout their lifetime. They severely underestimate the impact that time in compound earnings can have on your money. We know that investing can be intimidating, but it is worthwhile taking the time to learn about investing or get financial advice to determine the best strategies for you to create wealth and have no regrets later in life.

Spending too much on non-essentials

It’s so easy to purchase lots of small, non-essential items when you go shopping. These purchases are often rash, impulsive decisions because of how inexpensive the items are. But this adds up over the years, and many people regret it. This regret often arises when you realise that you have so many ‘things’ accumulated over the years that you understand just how unimportant the item was.

Not setting up an emergency fund

People often regret not setting up an emergency savings fund for when life happens. It is essential to have money saved for unexpected health problems, cars repair or losing your job.

You may find that you have already made some of these mistakes with your finances, but it is never too late to learn from your mistakes and set yourself up for the future. Get in touch with The Farm Protectors today to implement strategies and give yourself a clearer picture of your financial future.

Tips for Talking Money with Your Children

As a parent, you might be worried about talking about money with your children. You can develop good financial habits at an early age to set your kids up for the future and the financial challenges they will face.
We’ve outlined some tips for talking about money with your children.

Start at an early age

It’s never too early to start discussing money with your children, just be sure to keep it age appropriate. There’s a high chance that your children already know more than you think about money but will likely lack context to understand what money truly means.

Discuss money in real life situations

The best way to help your children understand money is to discuss it in real life, practical situations. This will weave money lessons into everyday life and help them to understand where money comes from. For example, when you are at the supermarket, you can explain to your children how items are priced and that there are a variety of different options available for different prices. This can teach them how to shop around for the best price possible.

Keep it positive

It is so important to keep conversations around money positive. While you might be stressed about your finances, you should never talk negatively to your children. Your kids might misinterpret any anxieties you have and develop fears themselves.

Ask Questions

Conversations are far more effective than lectures. If your child asks you about money, you can help their understanding by asking them questions in return. For example, your child will probably ask if you are rich. You can respond by asking them what they think rich is to help them arrive at their own conclusions about money.

Keep the conversation going

Instead of just sitting down with your child and having one discussion about money, it’s best to keep the conversation going. Your discussions will continue to evolve as your child, and their responsibilities and relationship with money grow.

Is A Self-Managed Super Fund Right for Me?

Many Australians choose to invest in Self-Managed Super Funds (SMSFs) for increased control, flexibility and transparency of their investments for retirement. There are many considerations to make when looking to open a SMSF to determine if they are the right choice for you.

1. Are you eligible to become a trustee?

If you are over 18 years old, you are eligible to be a trustee, as long as you are not classified as bankrupt, mentally incapacitated, charged with certain criminal convictions, or disqualified by a court or regulator such as the Australian Tax Office (ATO). If you are under 18, you are eligible to be a member of a SMSF but not a trustee.

2. Do you have an appropriate balance to operate a SMSF?

While there is no minimum balance required by law, you need to have an appropriate amount to invest when you open a SMSF to make it valuable You need to ensure that costs and fees do not absorb any investment returns. There are many costs associated with a SMSF, including establishment costs as well as ongoing tax returns, audits, and fees.

3. Do you have the time?

A SMSF takes a considerable amount of time, especially compared to a regular superannuation fund. With a SMSF you need to:

  • Research investment options
  • Monitor investment strategy
  • Be proactive with your investment strategy to continually adapt your plan when needed
  • Make sure you meet reporting deadlines
  • Keep up to date with superannuation laws and regulations that will affect your fund and your responsibilities

If you fail to comply with rules, you could face personal financial penalties or disqualification as a trustee. It is important to note that many trustees outsource administrative responsibilities to an accountant or SMSF expert. Ultimately, however, you are responsible for the operation and compliance of your SMSF and will be the one held accountable.

4. Do you plan on living overseas for an extended period?

Complex residency rules are in place for SMSF. A SMSF must be established in Australia, with management and control being carried out by trustees that reside in Australia. If you are planning to live overseas for more than two years, you will need to seek professional advice to ensure that you comply with the ATO and do not incur heavy penalties for non-compliance.

If you are unsure if a SMSF is right for you, the team at The Farm Protectors can provide you with guidance to make sure your investment will be worthwhile.

Common Estate Planning Mistakes That You Need to Know About

Did you know that one in two Australians dies without a will in place? Estate planning is considered a very low priority by Australians.

If you want to be in control of your assets and where they go when you die, you need to have an estate plan in place. You need to be wary of these common mistakes that people make with their estate plans.

Leaving it until later

Many people think that estate planning is something to do when you are older. However, anyone over the age of 18 should seriously consider having an estate plan in place as you will likely have several assets that can be passed on to loved ones if you pass away suddenly. Estate plans are especially important for young families as children will be dramatically affected if parents pass away prematurely.

Leaving people out of the will

It is not unheard of for relatives to challenge a will if they do not feel that proper provisions have been made for them. Each state has different laws that outline who can contest a will, and in some cases, it is quite broad. It’s best to get the help of a qualified advisor to structure your estate plan in a way that will benefit the intended beneficiaries and ensure your wishes are met.

Being too specific

Many people make the mistake of being too specific in their estate plans. An example of this is listing relatives by name, such as grandchildren. If your will is not updated and more grandchildren are born, any grandchildren not specifically named will miss out on their inheritance.

Not making power of attorney arrangements

Your estate plan should include more than just your will. Many people forget to include arrangements such as a power of attorney, outlining who can make any financial decisions on your behalf if you are incapacitated at any point in your lifetime.

Ignoring taxes

While Australia does not have an explicit death tax, there are many taxes that can have an impact on a deceased estate. For example, there could be taxes on any capital gains that occur when investment assets are sold to be distributed to beneficiaries. This needs to be taken into consideration when creating your estate plan.

Not updating an estate plan

When people do have their estate planned out, they often forget to update it as their circumstances change. Your will needs to be updated for any situation change, including births, deaths, and divorces, as well as any purchases or sales of assets.

The biggest mistake is not having an estate plan at all. Doing this will result in the state deciding where your assets will go, and it is likely they will have a different idea of who your beneficiaries should be. To organise your estate plan, get in touch with The Farm Protectors today.

5 Small Ways to Be Better with Your Money

Changing your mindset regarding money can have a lasting impact on your wellbeing and financial stability for decades to come. There are five small ways that you can be better with your money to help you reach your financial goals and enjoy life.

1. Choose a lifestyle and stick to it

As your salary increases, it is almost automatic to increase your spending. This is referred to as ‘lifestyle inflation’ and often leads to people looking back and regretting their choices and how they have spent their money. To limit this increased spending, it is essential to choose a modest lifestyle that suits you and stick to it, even when your income rises. This will ensure that you can increase the amount of money being saved and help to meet financial goals.

2. Think in decades, not years

Think back to all that you have done in the past decade, and you’ll get a good idea of what you might realistically be able to achieve in the next decade. You might find it helpful to talk with a professional to get your priorities for goals for the next 10 or 20 years. Setting goals for the decade will result in more achievements to look forward to and be proud of in the future.

3. Start saving straight away

So many people put off saving because they think that the timing isn’t right. People want to wait until they’ve paid loans or travelled, and feel they have the time. It is essential that you commit to start saving straight away, even if it’s only a small amount.

4. Think before investing in property

It is ingrained in our brains that we must invest in property and it is placed at the top of savings and investment goals for most Australians. However, depending on your circumstances, investing in property may not be the best option. It may be worth your while to discuss with a financial planner to understand different investment options that may be more effective in helping you reach your goals.

5. Consider what is important to you

Your goal in life should not be unlimited wealth. Take the time to consider what is important to you and make sure that you are spending on things that matter to you. By doing this, you will be able to make smarter choices regarding how you spend your money and achieve the balance between earning, saving, and enjoying life.

At The Farm Protectors, we are happy to develop an appropriate investment plan to help you reach your goals.

When Should You Start Estate Planning?

We tend to think that we are too young to start estate planning and drawing up wills.

However, this is not the case. Once you’re earning a salary and have superannuation in place, you will likely have assets to pass on if you were to die.

We’ve outlined the significant milestones in your life that you need to look out for to start planning your estate or reviewing any plans you already have in place.

Having children

It’s important to consider who would be the best choice as guardian of your children if something were to happen. You can also outline in an estate plan when you wish for your children to take control of their inheritance. Without a will in place, they will take control when they are 18 years old. For some, this may be more importance that the distribution of assets.

Buying a home

A home is usually the first significant asset that a person owns. For that reason, it is vital to identify who this would be left to in an estate plan.

Setting up a business

Owning a business likely involves owning assets. You need to outline in your estate plan if you wish for the company to continue operating or to make other arrangements for the assets after your death. It’s best to seek professional advice to take care of legal documents.

Getting married or separated

When getting married, it’s a great idea to draw up an estate plan as will likely have several joint assets that you need to agree upon. Similarly, when separating from a partner, the assets will no longer be joined, and you may not wish for the same allocation of assets if you were to die.

A death in the family

People are often motivated to start making their estate plans when other family members die. This is especially the case when there is no will in place, and you understand the stress caused to the family when dealing with their affairs and assets.

It’s best to seek professional advice when planning your estate, but the milestones above are just some of the circumstances that could arise and indicate that you need a plan in order. If you already have an estate plan, it is recommended that you check in every few years. At The Farm Protectors, can assist in creating clear and unambiguous plans that make it easier for your executor.