Investments – build your wealth and grow your retirement savings Speaker’s name Title/department Month, 2016

Agenda What is investing and how it works Investment vehicles Asset classes Things to consider when investing Investment strategies Next steps Questions

What is investing and how it works

Investing is the process of getting money to work for you. It is a powerful way to grow your wealth. People invest for different reasons i.e. saving for a big holiday, to fund children’s education, repay the home loan faster or increase their retirement nest egg. The key to successful investing is to identify your investment goals and the time frame over which you want to invest. 4 Investment goalTimeframeSuitable Investment Short term i.e. new car 1-3 yearsCash, fixed interest and money market securities Medium term i.e. home deposit 3-5 yearsEmphasis on fixed interest with some cash and growth assets (such as property and shares) Long term i.e. retirement 5+ yearsEmphasis on growth assets (such as property and shares)with some access to cash

Investment vehicles

Investment vehicles are simply the different structures in which you hold your investments. –Deposit products –Property trusts –Insurance bonds –Managed funds –Listed Australian shares –Listed shares on international stock exchange –Wrap accounts 6

Asset classes

There are a number of different asset classes in which you can invest. Each asset class carries with it a different level of risk and return and may perform differently at different times of the market cycle. It is important to spread your investment across a range of asset classes, known as diversification, the higher returns that you receive from one asset class may offset low returns from another asset class. These include but are not limited to: –International shares –Australian shares –Property –Australian fixed interest –International fixed interest –Cash 8

Things to consider when investing

Key investment principles: Risk and return – different investments carry different levels of risk, you need to work out which you are most comfortable with. Volatility – relates to the tendency for the value of the investment to fluctuate over time. Capital liquidity – how easily funds can be sold and on what terms Diversification – spreading investment money over asset classes, sectors within asset classes, regions or investment styles. Dollar cost averaging – investing a set amount of money on a regular basis over a long period of time. Buying quality assets and setting realistic timeframes. 10

Things to consider when investing The different types of risks associated with investing: –Market –Investment specific –Inflation –Interest rate –Diversification –Currency –Credit –Liquidity –Legislative Income or gain from investments Tax on investment income/earnings/gains 11

Investment strategies

1.Pre-pay investment loan interest and reduce this year’s tax 2.Invest inside super to save tax 3.Use super to manage tax 4.Sell a small business tax-effectively 13

Investment strategies 1. Pre-pay investment loan interest and reduce this year’s tax The interest you pay on a geared investment is generally tax-deductible in the year it is incurred However, you may be able to prepay up to 12 months’ interest on the loan and claim the tax deduction in the current financial year Prepaying interest may allow you to: –reduce your taxable income this financial year –lock in the interest rate you pay for the following year Note: the prepayment must be made before 30 June and you cannot ‘claw back’ any interest payments if the account is closed or repaid. 14

Investment Strategies 2. Invest inside super to save tax Investments held in super funds are taxed at 15% or less, rather than your personal marginal tax rate of up to 49% (including Medicare 2% and 2% Temporary Budget Repair Levy) < age 65 - Non-concessional contributions are limited to $180,000 a year (2015/16), or you can bring forward two years’ worth of contributions by contributing currently up to $540,000. > aged 65 – Non-concessional contributions are limited to $180,000 a year, and you can’t make a super contribution unless you satisfy the work test 15 $150,000$180, June June June June 2017 $0 $180,000$540,000 $0 30 June 2018 $180,000

Investment strategies 3. Use super to manage tax If you’re self-employed and make personal contributions to super, you may be able to claim the contribution as a tax deduction This can be an effective strategy as the deduction is a good way to offset assessable income you may have made this financial year For example, if you’ve sold an asset (like an investment property) during the year and have made a significant capital gain, the tax deduction from your super contribution can reduce your personal income and the tax that would have been payable* What’s more, investment returns in complying super funds are concessionally taxed at a maximum of 15% – as opposed to your personal marginal tax rate of up to 49%** * Note: Realised capital gains form part of your assessable income. Concessional super contributions in excess of the contributions cap are taxed at the individual’s marginal rate with a 15% offset for tax payable by the super fund. An interest charge is also payable. ** Including Medicare Levy of 2% and the Temporary Budget Repair Levy of 2% 16

Concessional Caps 17 Concessional Contributions2015/16 Up to 49 years old$30, years +*$35,000 * Those aged 49 at 30 June of preceding financial year

Investment strategies 4. Sell a small business tax-effectively Subject to meeting the basic conditions, small business owners can take advantage of the Government’s small business capital gains tax concessions to reduce or even extinguish any capital gains tax (CGT) realised from the sale of a business or business asset If the business asset was held for 15 years or more, and the owner is either over 55 and retiring or permanently incapacitated at the time the asset is sold: any capital gains could be disregarded; plus up to $1,395,000 of any sale proceeds could be contributed into super without counting towards the concessional or non-concessional contributions caps If the business asset was held for less than 15 years, the owner may be entitled to a further 50% per cent reduction on their capital gain in addition to the general personal 50% CGT discount and disregard up to $500,000 of the remaining capital gain if certain conditions are met Note: If you’re considering this strategy, it’s important to seek professional financial, legal and tax advice specific to your circumstances 18

Next steps

Consider your short and long term goals Determine your investment risk profile Speak to a Financial Planner to discuss your goals and financial circumstances 20

QUESTIONS Disclaimer

This information was prepared by Asgard Capital Management Limited ABN , AFSL (Asgard). The information in this presentation is current as at February Material contained in this presentation is an overview or summary only and it should not be considered a comprehensive statement on any matter or relied upon as such. This presentation contains general information only and does not take into account your personal objectives, financial situation or needs and so you should consider its appropriateness having regard to these factors before acting on it. All case studies and examples used in this presentation are for illustrative purposes only and nothing in this presentation should be construed as an indication or prediction of future performance or results. Any taxation position described in this publication should be used as a guide only and is not tax advice. You should consult a registered tax agent for specific tax advice on your circumstances. As the rules associated with the super and pension regimes are complex and subject to change and as the opportunities and effects differ based on your personal circumstances, you should seek personalised advice from a financial adviser before making any financial decision in relation to any matters discussed in this presentation.

“Thanks”