There is little doubt of a bubble in the housing market. Gains of 50% or more in Sydney and Melbourne over the course of the last half-decade were unsustainable, as cheap credit and a pinched supply conspired to send housing prices in to the stratosphere. In real estate, the relatively inelastic supply curve is a major market distorter – you simply cannot create more housing on-demand. Housing takes time to build, even after approvals, funding, and buyers are all covered.

But the reality of the Australian housing market draws few parallels with that of our American cousins in 2007, and this decreases our chances of a housing market collapse to match theirs. As your financial planning service in Kingsgrove and for all of Sydney, we think there are some fundamental reasons why.

Reserve Ratios

One of the biggest reasons that America’s housing market collapsed was due to its overextended credit market. Banks, and in fact, the vast majority of economists and pundits, viewed the housing market as nigh-unsinkable. This hubris led to a huge market for cheap sub-prime mortgage bonds, and in turn, to poor, incentive-driven lending practices, selling the dream, as it were, of home ownership. In Australia, we have long implemented a higher reserve ratio for our banks – meaning they must have cash available should even their largest investments sink beneath the waves.

ASIC and APRA

Our methods of oversight take a dim view of improper lending practices. Australia actually emerged relatively well from the credit crunch, but this didn’t stop APRA and ASIC from recommending tighter lending regulations. Australian banks had not delved in to truly risky, subprime mortgage loans to the same degree as the Americans had, primarily due to such oversight.

To boot, the recent Royal Commission saw the Big Four banks called to testify about such issues as misinformation and money laundering. They collectively copped an enormous fine for their misdeeds – putting them in no mood to run afoul of the regulator for the time being.

None of this negates the reality of a market correcting itself after a period of strong growth. This is one reason why TLK Partners is working to reduce our client’s exposure to certain areas of the housing market, in particular, the residential sector. But a full-blown collapse? It seems highly unlikely.

At TLK, we provide Kingsgrove, Beverly Hills, and the entirety of Sydney with financial planning services that can ensure you navigate the vagaries of the global marketplace, regardless of the state of the economy. Contact us today and let’s get you started on the path to prosperity.

This massive group is raising a number of questions insofar as the state of our aged care system, but aged care goes well beyond that of retirement homes. It extends itself in to financial services, where the requirements of retirees provide new challenges to your financial planner here in Beverly Hills, and throughout Sydney.

Income Requirements

In the past, assets like pensions or savings funds tended to serve to fulfil the needs of retirees as they aged. This trend has become less applicable to recent years, and this has created the need for new income streams. Services such as reverse mortgages have become one method by which some people may make use of their assets as an income stream.

Stewardship

Asset protection, rather than asset growth, demands a different form of financial stewardship. The mix and diversification of assets will become different, as the goal becomes more of providing stability through market change, rather than emphasising growth.

Management

Staying on top of our mental state as we age is another thing to consider. Health issues can impact us, and apart from creating issues with our standard of living, can hurt our decision-making abilities. In these cases, finding a financial planner can be absolutely essential to safeguard our wealth.

Here at TLK Partners, our varied knowledge base and devotion to our clients’ well-being has grown our reputation as financial planners throughout Sydney. We are looking forward to providing the same care for you. Contact us today for a no-obligation chat.

While many areas of the not-for-profit world provide a means of earning tax deductions, the devil is in the details. Not all donations are tax deductible, and the rules are interpreted very strictly. As your tax accountant for Beverly Hills and Sydney, we encourage you to toe the line.

What sort of donation is tax deductible?

For a donation to be tax deductible, it must be cash or property, and must constitute an honest donation – you cannot receive anything in return for the donation. This stipulation isn’t only limited to cash or gifts – it extends to future considerations, as well, such as promises of future considerations.

This includes such innocuous items as food, drink, raffle tickets, or badges, as these are regarded as transactional. Crowdfunding was recently struck from the list, as well. However, so-called ‘tokens’ are not covered by these rules. For example, you can receive something like a lapel badge, a button, or a sticker.

Who can receive it?

Charities must be registered as a Deductible Gift Recipient by the ATO to qualify as charitable causes. Check their website to confirm, or you can look them up by their ABN number on the ATO website. Some of Australia’s largest recipients include the Australian Cancer Council, the Australian Red Cross, and World Vision.

Charitable donations can serve as an excellent method of putting your money behind causes that speak to you, and can serve as a great method of maximising both your tax return, and the use of your hard-earned money.

At TLK Partners, we can direct your cash flows in the optimum direction for your financial goals. As tax accountants for Beverly Hills and throughout Sydney, you can put your faith in our expertise. Contact us today.

A variety of mobile phone apps and innovative tracking software has allowed us to take considerably greater care in tracking and compiling a list of where our money is going. It can operate as an unconscious method of saving, with almost no involvement from us. And of course, it can keep us in touch with the state of the market. Here are some of our favourite tech innovations that can help you to control spending and reach your financial goals.

Raiz

Formerly Acorns, Raiz is a saving tool that skims nearly unnoticeable amounts from your checking account throughout the course of the month. So, when you spend $1.50 on your debit card, Raiz rounds it up to $2, and puts that extra fifty cents in to a savings account. It might not sound like much, but it accumulates quickly.

Honey

A browser add-on, Honey makes use of the remarkable computing power of the web today. With a unique search algorithm, it searches out discount codes for your purchases, which are then applied at point of sale. The savings can be anything from 2% to 20%, but over the long run, they can help your bottom line quite a bit.

Pocketguard

One of our favourite mobile apps, this handy tool breaks down spending in to allocated columns – and lets you know, in brutal honestly, exactly what you have to spend, and where it is all going. Offering you insights in to your spending habits can help you plan for the future, and avoid as many impulse spending decisions, as well.

Prism

This app puts your bill management all in one place. With a linked account, you can cover your bill obligations directly from the app. You can schedule payments, you get reminded of impending due dates, and receive confirmation notifications, all in one easy app.

As your Beverly Hills financial advisers, we can help you to reach your goals. Contact us today to find out more.

At TLK Partners, we spend a great deal of time researching the market, to ensure that our clients are engaged in areas of the market that suit their goals and their risk profiles. And while our information concerning the market is available in real time, we also tend to lean on some truisms, which have outlived the growth and the deflation of trends consistently, for the past one hundred years or so.

Stocks Offer Consistently High Returns

Lost in the panic of the sudden shocks of 1929, 1987, and 2008 is the realisation that no other asset class has provided the same amount of growth as stocks have. They have consistently outperformed bonds by a ratio of roughly 2 to 1 – and the so-called ‘riskless’ bond, it turns out, will fluctuate in value in much the same pattern as stocks do (albeit to a lesser degree of magnitude). Since 1980, they have set the standard across the western world, beyond their comparative risk.

Property Does Offer Stability

The impact of the credit crunch in 2008 was widespread and immediate. The world’s largest housing market, grossly swollen by overextended lines of credit and weak oversight, crashed spectacularly, and the impacts were felt globally. Even countries who had not inflated a housing bubble to the same extent felt the pinch. This reality, however, should not be considered par for the course. Data clearly shows that property is among the safest investments out there.

Diversification will never go out of style

More than a few fortunes have gone up in smoke when the owner began to treat their assets like a stack of poker chips. This isn’t a game, however – never, ever put all of your eggs in one basket, no matter how much of a ‘sure thing’ it may be.

Among Kingsgrove’s and Beverly Hills’ wealth management firms, TLK Partners stands out, for its attention to detail, and commitment to our clients. Contact us today to find out more.