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2. Important Legal Information
Nicole Heales is an Authorised Representative of Capstone Financial Planning Pty Ltd (Capstone). Capstone holds Australian Financial Services Licence (AFSL) No
Nicole Heales is a Credit Representative of Crown Lending Pty Ltd (Crown). Crown holds Australian Credit Licence (ACL) No
The advice provided in this presentation is general advice only. General advice is defined as advice that has been prepared without taking into account your objectives, financial situation and needs. Before acting on the advice, you will need to consider the appropriateness of the advice, having regard to your objectives, financial situation and needs. If the advice relates to the acquisition, or possible acquisition, of a particular financial product, you should obtain a Product Disclosure Statement (‘PDS’) relating to the product and consider the PDS before making any decision about whether to acquire the product. Whilst every care has been taken to ensure the accuracy of the material presented, Capstone, Crown and their authorised representatives will not accept any liability for any errors or omissions in the information provided.

3. Talking About
Consumer debt
Mortgages
Insurance

4. Credit Card Debt 11% to 21% $32 billion owing
$4,300 per card holder average
$700 in interest per year
Minimum repayments will take 31 years
Cost $14,900 in interest
$216 each month debt paid off in 2 years and save $9,700 in interest
$50 week gets back 29 years plus $10,000

5. False Economy Money in savings account and debt
Interest earned ALWAYS less than interest paid
Pay tax on interest earned
Keep 3 months living expenses
Pay down your debt

6. Personal & Car Loans 8% to 15%
Save first then buy!
24 to 36 months interest free deals – be careful
Shortest loan possible
Longer the term the more you pay
Second hand car
End of calendar year run out sales

7. Credit Card Reduction Don’t ignore it Stop using Debit cards
Transfer credit card balances to lowest rate
Pay highest interest rate loan first
Payments greater than the minimum, always
Snowball effect

8. Mortgages Don’t buy a house you can’t afford
Don’t trade your life for a mortgage
First home is not dream home
Always use a broker
Look outside the top 4 banks
Think 7% long term average

9. Types of Mortgages Principle and Interest - pays down the debt
Interest only – debt remains the same
Offset account – interest is offset
Redraw – extra repayments available
Fixed – in bank’s favour and penalties
Honeymoon – don’t do it
Variable
Cheaper rate - longer term and less features

10. Mortgage Reduction Make it a priority
Payments greater than the minimum, always
Extra repayments at the beginning
Salary credit into mortgage
Extra payments (fortnightly)
Annual lump sum payment (tax return)

11. Insurance 79% Car insurance 77% Home Contents and Building insurance
69% Private Health insurance
45% Income Protection
22% Life Insurance
Do you take out travel insurance?
WHY?
ASIC, IFSA, DEXX&R, Rice Warner

12. Under Insured
Only 30% of young families Life insurance needs are covered by default within superannuation
60% families could not cope more than 12 months should main breadwinning parent die
ASIC, IFSA, DEXX&R, Rice Warner

13. Ask yourself
What would my life look like without my income if I was sick or injured?
Could my family survive on one income?
Could I afford to pay the mortgage/rent/car loan/medical expenses and put food on the table?
Could I keep the kids in school?
Government $794.80(single) $599.10(couple) a fortnight Centrelink

14. What it can mean 50% reduction in household income (or more)
100% reduction for singles
Can’t afford best medical care
Taking kids out of school
Selling family home
Moving to a smaller rental
Moving further out
Can’t renovate to suit new situation

15. Protect Yourself and Your Family
Life Insurance
Death or Terminal
Debt plus cost of running family without you
Singles without dependants don’t need it
Total and Permanent Disability – 3 months
Musculoskeletal, neurological, mental health
Debt, running family, and extra costs for you

16. Protect Yourself Trauma Cancer, cardiovascular, stroke
At least $100,000
Pays medical costs
Income Protection
Musculoskeletal, mental health, cancer
75% of your income
10% into super
Tax Deductible

17. Insurance Terms Stepped premiums – increase with your age
Level premiums – much cheaper over long term
Indemnity – need to prove salary at claim
Agreed – benefit agreed at application
Waiting period – 30,60,90
Benefit payment – 2 years, 5 years, to age 65
TPD ANY harder to claim
TPD OWN covers your last profession
It’s complicated, see an adviser

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