Paul's Insights: A busy month for investors

 

June 2017

As well as all the usual tax planning, for those who run a business turning over less than $10 million, the instant asset write-off of up to $20,000 per item is still available to you.

Superannuation, in particular for someone like me in a transition to retirement pension, also requires a fair bit of work given all the new complex rules coming into effect. For many, the reduction of annual tax-deductible contributions to super from $35,000 to $25,000 on July 1 may also impact on your future wealth creation plans.

We also have a complex investment environment. Growth in our economy is ok, but not exciting. Jobs growth and unemployment are pretty good, but wages growth is low, leaving consumers who hold a lot of debt feeling the pinch. The property boom, mainly in the big East Coast cities, is clearly slowing. If this continues, the Reserve Bank will breathe a sigh of relief and cut interest rates.

If this happens, many will be happy. But what about we investors who like a bit of income? If rates are cut, and there is no certainty of this, then your already sick-looking term deposits and cash in the bank will look even sicker.

As I look forward, the search for investments that will grow in value, and deliver income returns that also grow, is a challenge. Despite very expensive property in our big cities, by any measure you care to use, Australia's strong population growth still makes the long-term prospects for property values and rental returns look reasonable.

Where good-quality shares and property have a fair bit in common is as investments that provide a growing income stream. The biggest change of all in our society is longer life, which has increased by an extraordinary 25 years in just the last 100 years. So, the days of reaching 60 or so and keeping money in the bank to provide income to live are long gone. Despite the drastic ups and downs in capital values, we'll all need to be using investments such as shares and property to generate the income we need.
Here is where we can help. At InvestSMART, we are committed to providing information to help you make better investment decisions and the tools you need to manage, monitor and implement your investments.

We also have a range of transparent and low-cost investment options that can help you to create wealth and generate a growing income stream.

Take a look at the range of InvestSMART investment options available to you. The world is complex enough, so at least we can make investing a fair bit easier for you!