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You’ve got a truck load of company options or RSU’s. Now what? 1024 684 Fox & Hare

You’ve got a truck load of company options or RSU’s. Now what?

We all appreciate when our boss acknowledges that we’ve gone above and beyond at the office. Working hard and hitting our KPIs is something that should be rewarded, right? And for many of us, that can mean bonuses when tax time rolls around. Another common alternative to the traditional periodic bonus, is the chance to take part in an employee share scheme.  

This scheme is a common way for companies to motivate high-performers by offering shares as a lucrative reward for good results. But it’s also a way for companies to lock employees into a job.  

Think about it like this: your performance has an impact on the profitability and results of the company, which also impacts the value of its shares (which you are now personally invested in). The idea is offering a financial piece of pie will incentivise you to work harder to increase the value of the business.  

For many who take up the scheme, this is their first serious step into investing. And this isn’t a small amount of money we’re talking about. For those who’ve been with a company for a number of years, these shares can amount to hundreds of thousands of dollars.  

But going into a scheme like this with zero stock market knowledge (and not managing your shares proactively) can tie up your wealth with one company and reduce your chances of meeting your long-term financial goals. And with thousands of your dollars at stake, taking a backseat and doing nothing when in an employee shares scheme can leave you with less than you started with.   

Too often, we see our members unsure how to navigate restricted stock units (RSUs) and how to connect this wealth to their overall financial goals. It’s the part of their portfolio they don’t understand or haven’t taken the time to factor into their big picture plan. So, is doing nothing a feasible option? And if not, what should we be doing instead? Let’s dive into 3 of the most common challenges our members face in employee share schemes and how we can help you take control of this wealth. 

 Challenge 1: Unsure how to align this wealth with your goals  

Being offered a share in your company is a pretty flattering prospect. In most cases, our members opt into a scheme like this and don’t ask many questions. Shares take care of themselves, right?  

But how does this extra pot of wealth impact on your broader financial horizons? This is a stumbling block many of our members face. Suddenly they’re lumped with huge sums of money and unsure how this can help them towards their long-term goals of buying a home or generating a passive income.  

It all comes back to education. When we’re not educated about the stock market or how our shares can help us create wealth, we feel stuck and put the idea into the ‘too hard’ basket. But when managed correctly, these shares can be a powerful player in your investment portfolio and help you unlock the financial freedom and flexibility you’re working towards.  

The key is to get clued up on how this wealth works and start proactively aligning these funds with your long-term goals. Remember: doing nothing prevents you from capitalising on this investment opportunity (which could help you save for your first home or reach early retirement sooner).  

 Challenge 2: Lack of diversification

Let’s call out the obvious before we start: all investment options come with a level of risk. Unless you’re stashing cash under your mattress (not something we’d recommend), investing your money in shares, property or bonds carries a level of risk.   

What makes RSUs particularly risky is the distinct lack of diversification in this investment option. Essentially, your wealth is dictated by the value of one company’s performance. There are no other assets shielding your portfolio from market up and downs, leaving you more vulnerable to losses that can impact your long-term financial goals.   

When we work with our members to create investment strategies, diversification is at the top of our list. Why? Because a diverse portfolio of assets spread across a broad range of industries fosters financial resilience (a.k.a. safeguards your wealth from the ups and downs of the market). The value of individual stocks will fluctuate over time and a diversified portfolio helps lessen the blows of any major downturns or market slumps.  

And for those who haven’t paid attention or actively managed their RSUs over the years, they might be holding onto them long after they should have been sold. Essentially, this heightens the risk of losses. Remember the saying, ‘don’t put all your eggs in one basket?’ That’s exactly what we’re talking about. 

Challenge 3: Tax implications 

Tax isn’t a hot topic of conversation, but we need to tackle it. Because if you take anything from this article, make it this: RSUs require active tax management, meaning you are responsible for paying the tax bill. And no, avoiding the tax man isn’t a smart option.  

RSUs have a vesting period (usually a specified number of years), which means you have to wait out this period before being able to take ownership to sell these shares. Along the way, you might be able to gain access to a certain portion of the full amount. For example, say you receive $100k worth of RSUs, with a vesting period of 3 years. After 1 year, you can access 33% of the total amount, then another 33% the following year and finally the full amount after year 3. And if you leave the company before this period is up, you forego the remainder of your shares.   

It’s important to note that you do have to wait until your RSU’s vest and become shares before you can sell them. But that doesn’t mean you can’t start planning how you’re going to navigate the tax implications of this investment! Because you have the vesting schedule from the beginning, we can help you work out roughly what your tax bill is going to be. This proactive approach means we can plan to potentially sell some of the resulting shares to cover the costs of tax or ensure you have accumulated enough cash to meet the tax bill.  

Plus, when you do sell the resulting shares, you’re also liable for the capital gains tax. But with proactive management you can receive a 50% discount on capital gains as well as offset your capital losses with gains made from your investments.  

Moving forward, if you were to cash in a portion of these vested shares, we would then help you invest in a more tax effective manner.

We are here for you!

When it comes to RSUs, feeling confused and uncertain is all too common. Many of our members come to us with the same problems and questions, unsure how to be using this wealth to their advantage. We understand that the process can seem complicated and overwhelming, but you don’t need to go it alone. We work with members just like you who are struggling to get a handle on this newfound wealth.  

We can help you understand what these shares mean for your wealth and how to make this investment a powerful way to help you reach your long-term goals. Because the last thing we’d want is for inaction to cause you to miss out on what’s most important to you. Get in touch with us and let’s chat about how we can make your RSUs work as hard as you do. 

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9 top tips for starting to invest

Jess shares her top tips for investing alongside Clayton Daniel & Sarah O’Carroll at Yahoo Finance’s Breakfast Club!

As share markets experience incredible volatility, the question on a number of Australians’ lips is: “Is now the right time to invest?”

And according to the experts, the answer is generally “yes,” provided you understand the rules of investing.

  • Covid-19 crash: Is it finally time to start buying stocks?
  • Hot tips: Where to invest during coronavirus
  • Australians are jumping into the sharemarket: This is where they’re investing

Speaking to Yahoo Finance Editor-in-Chief Sarah O’Carroll during the inaugural Yahoo Finance Breakfast Club: Live Online, co-founder and financial adviser at Fox & Hare Jessica Brady and XY Adviser managing director Clayton Daniel shared their top tips for first-time investors.

  1. Don’t try to time the market
    Brady said trying to time the market is a “dangerous game”, and that investors will never know the bottom of the market until it’s past. Instead, it’s better to make sensible investment decisions more broadly, rather than jumping in simply because prices are cheap.
  2. Make sure you have a buffer
    Questioned on how much money is required to begin investing, Brady said it’s important Australians have a cash buffer of at least a few months, and then to begin investing with however much is left over. That way, should unemployment or other unexpected expenses strike, investors won’t be scrambling to pull funds from their investments and potentially selling when the value of their investments is low just to access the cash.
  3. Just start
    “Starting is always the best thing to do, because you care more,” Daniel said, suggesting that instead of waiting to hit a particular savings goal, investors just start investing – provided they have a buffer. He said there are several apps out there that can help investors understand market movements, and build an awareness of what it feels like to watch your investments go up and down. And they don’t cost a lot: apps like Raiz and Acorns allow investors to begin investing with spare change.
  4. Set your goal
    Is your goal in investing to build a tidy nest egg? Or are you keen to have more money to spend now on purchasing a home or travelling? “The first thing to think about is: ‘what are you aiming to do with your investment’? Is it short term, is it long term, is it a bit of fun, is it to have money for the future?” Daniel said.Brady echoed that, noting that many first-time investors won’t have seen a lot of market volatility before. “There’s a couple of key things to consider if you are a first time investor: definitely work out what is the goal that you’re investing for then really think through what is your appetite for risk,” she said. “Up until now, a lot of investors haven’t [had their risk appetite] tested, and it can be really easy to watch your money going backwards, effectively, in terms of what the investment is and not stay the course.”So you need to really understand your appetite to risk and make a commitment to yourself that if you are genuinely doing this for the long term, you will stay the course.”
  5. Consider fees and costs
    “Make sure that you have a really good understanding of what it is actually going to cost you, and what are the performance figures for that investment as well,” Brady said. This means making sure your fees aren’t rolling up with the performance you receive, and considering whether paying for a relatively expensive actively managed fund is a better option for you than investing through a cheaper index fund.
  6. Diversify your portfolio. (Put simply: Don’t put all your eggs in one basket)
    One of the best ways to protect your investments is by holding a diversified portfolio. That just means not having all of your eggs in one basket, or all of your money in one type of investment. Investing through an exchange-traded fund or ETF is one way to do this, as an ETF offers you the chance to invest in a basket of shares, often grouped by an index. That means that as the index goes up or down, your investment value does as well.
  7. Be sensible
    When it comes to picking individual stocks, Daniel said his rule of thumb at the moment is to simply consider the companies that are doing well at the moment. So, transportation groups like Qantas and Uber aren’t doing as well because no one is going anywhere, and this is a trend that will continue until the virus is brought under control. On the other hand, social media companies, supermarkets and tech firms like Zoom are seeing strong performance as their services are being used more widely. Essentially, he’s looking at companies that consumers are using without needing to leave their homes.
  8. Sort out your cash flow
    Daniel said the greatest piece of advice he ever received was to figure out what his real salary was. That is, how much of your salary is left over once you’ve taken out your fixed costs? Reduce your costs and increase your cash flow. Then, start thinking about money you can afford to funnel away into investments.
  9. Do your homework
    Resources like ASIC’s MoneySmart website can really help you understand the basic ins and outs of investing, while Brady said it also doesn’t hurt to talk to your friends and family about how they’re investing and why – “with a grain of salt”.
– By Lucy Dean, Yahoo Finance, April 9th 2020.
The 4 Reasons Your NY Resolutions Have Failed 1024 723 Fox & Hare

The 4 Reasons Your NY Resolutions Have Failed

Glen features in this months issue of Urban Village sharing the 4 reasons your New Years resolutions will fail.

We all kick off the New Year with the best of intentions. From signing up to an 8-week fitness challenge at the gym to promising we’ll meal prep our lunches every Sunday, setting ambitious resolutions may seem like the perfect way to get the New Year off to a productive start. But what happens next? It is March after all! Discover the top four mistakes that could be sabotaging your chances of hitting your financial goals in 2020.

  1. Your goals aren’t SMART
    Creating New Years’ resolutions is about more than just writing a list and hoping everything will fall into place. Whether you’re looking to finally pay off your credit card debt or saving to buy your first property, setting financial goals is all about planning with an end point in mind.One of the best ways to set effective money goals is to follow the SMART method. Whatever you want to achieve for your finances in 2020, make it Specific, Measurable, Achievable, Relevant and Time-bound. Instead of setting the goal to “start investing”, try creating a SMART goal such as “work with a financial adviser to invest $10,000 in a share portfolio by June to start generating passive income”.
  2. Your goals aren’t aligned to your values or motivations
    Consider what’s most important to you in the long term and assess whether your goals match up with these core values. If owning your own home is a top priority, reassessing your budget and getting serious about investing might need to be your focus for the year ahead.
  3. You write your goals down without a plan of action
    You wouldn’t turn up for dinner at Chin Chin on a Saturday night without booking ahead, so why set a New Years’ resolution without a plan of action? Once you’ve clarified your ‘why’, the next step to hitting your financial goals is to create a roadmap of actions to get you there. Break down big goals like “saving $50,000” into weekly and monthly actions such as setting up automatic transfers to match your pay cycle and create realistic weekly budgets. The golden rule? Hold yourself accountable by scheduling regular check-ins thorough the year to assess whether or not you’re on track.
  4. You are not prepared for setbacks or roadblocks
    Unfortunately, life doesn’t always go to plan. No matter what the year ahead throws your way, being prepared for stumbles and setbacks is essential. From your car breaking down on Oxford Street to forking out for a new phone after a mishap in the pool, expect the unexpected and be ready to adapt to roadblocks that may pop up throughout the year.

And most importantly, get back on the horse
Even when unexpected challenges arise, remember you can always find a way to get your finances back on track. Instead, use these hurdles as motivators to help you pivot, readjust your approach and take proactive steps towards meeting your financial goals for 2020.

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Jess’ top tips for business’ going digital

Jess shares with Financial Standard Fox & Hare’s working from home transition and the technology that enables us to work so efficiently.

For Jessica Brady, the co-founder of Fox & Hare Financial Advice, the move to working from home has seen very few hiccups.

“I basically told everyone to grab their monitors and go home, and because we do use quite a lot of tech (with a few little exceptions) we were able to be back online and operational that afternoon,” she said.

“We’ve been Zoom users for a very long time now and use it to conduct all our meetings, while Loom is something we use to record ‘how-to’ videos.

“We also use DocuSign so our clients can sign-off on their Statement of Advice, but one of the coolest pieces of tech we use is called FileInvite.”

This software provides Brady’s clients with a secure portal to upload all their required documentation, while her team can see what the client has filled out, any notes they have made, and they receive a notification once all the documents have been completed. Then – it’s just an easy download to the cloud, she said.

“That has been an amazing piece of tech that we’ve been using for a long period of time, and perhaps could be helpful for people who want something more secure than email or who up until this point had been asking people to bring information in,” Brady said.

Although Brady’s practice is set up to deliver her client’s advice digitally, she has experienced a few roadblocks with some product providers still demanding paper-based documentation.

“It blows my mind that in 2020 there are still some providers who need original copies of documentation, or who still require paper-based applications,” she said.

“Not only is that really bad for the environment, but it just doesn’t make sense in a 2020 context, particularly not at the moment.”

Brady said despite government imposed social isolation, providers were not making any changes to their processes.

“I understand providers are busy trying to get everyone working from home, but I think that there’s only a few outliers that need to digitise their processes so that the advice experience can be done online,” she said.

Unfortunately, she said, there is no perfect tech solution – yet.

“The frustration is there’s no one ‘perfect product’; you just want something that does everything and we haven’t been able to find it,” Brady said.

Read the full article here. 

By Ally Selby – Financial Standard 

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What wise investors should do in a volatile stock market

The Fox, Jessica Brady, talks to Yahoo Finance on how to invest wisely in a volatile market.

Stock markets have moved wildly in the last few months as geopolitical tensions and viral outbreaks spook investors.

In such an environment, experts are urging investors to hang tight and take advantage of the rises and falls.

“A lot of people are quite scared by market volatility, but if you’ve got a really long time horizon … volatility or downturns can present great opportunities for investors,” Fox & Hare financial adviser Jessica Brady told Yahoo Finance.

The most recent stock market slumps have been driven by anxieties around the coronavirus Covid-19, with the Bank of America predicting that 2020 would be the worst year for the global economy since 2009.

But outbreaks like coronavirus aren’t as out of the ordinary as some might believe, Brady said.

“This isn’t the first time we’ve seen something like this in terms of pandemics, and markets have responded in a volatile way.”

However, investors these days have immediate, digital access to their portfolios and are making rapid decisions on their investments.

During the global financial crisis, investors who didn’t stick it out ended up making major losses. “To be honest, if they had just stayed in the market, a lot of them would have recovered. But instead, they accepted a large loss.”

Brady’s top tips for investing

1. Don’t put your eggs in one basket

2. Invest according to how quickly you want to make money

3. Keep calm and carry on

Read full article here.

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Fall in love with your financials

February 14th is said to be the most romantic day of the year. Whether you’re in a loved-up relationship or hoping to score a surprise from a secret admirer, love is most certainly in the air on Valentine’s Day. And this year, we’re challenging you to fall head over heels in love with… your finances!

Taking control of your money shouldn’t be a drag. In fact, mastering your finances is one of the most empowering things you can do for yourself (both now and into the future). Ready to learn how to rekindle the spark with your finances? Keep reading to find out more!

Create SMART goals

Do you avoid checking your bank balance at all costs? Are you putting off consolidating your super accounts? Not sure how to tackle that pesky credit card debt you can’t seem to shake? Whatever situation you find yourself in, the first step to falling in love with your financials is to set clear, strategic goals.

Our tip? Set yourself up for success by following the SMART goal-setting method. In a nutshell, this framework is all about creating goals that are Specific, Measurable, Attainable, Relevant and Time-bound. Rather than creating broad goals like “start saving”, try drilling down into exactly you’re trying to achieve by setting goals such as “save $100 per week into a high-interest savings account to reach $5,000 by December”. This goal-setting method helps to clarify exactly what success looks like and creates a roadmap for the steps you need to take each week to get you there.

Take control of your cashflow

Mastering your day-to-day spending will alleviate financial stress and boost your capacity to build wealth to help out your future self. The best bit? The formula for cashflow management is as simple as 1-2-3. Simply spend less than you earn, set up an achievable savings plan and invest regularly.

Say yes to investing

Speaking of long-term wealth, nothing is more empowering that securing a bright financial future. One of the most effective ways to do so is by diving into the world of investing (and trust us, it’s not as intimidating as you might think).

From purchasing shares to setting up a high interest savings account, there’s a type of investment to suit every level of risk tolerance. Plus, the sooner you start the better off you’ll be in the long term. Why? Check out our video on compounding to discover how interest can supercharge your long-term wealth.

Share your financial story

Every healthy relationship is built on open communication, and the same is true for your finances. But for many of us, talking about money with our friends, family and partner can be oh-so-intimidating.

So, why is it important to talk about money? The more we talk about money, and the financial questions we have, the more likely we are to learn something new and improve our financial literary. Plus, normalising money chats is essential to improving outcomes for everyone when it comes to understanding everything from tax and investing to benchmarking salaries and super contributions.

Want to learn more about why we need to smash the final taboo of money? 

Book in a free coffee with us here.☕️

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How Fox & Hare has changed the industries traditional client base

Neither Jessica Brady nor Glen Hare had ever operated their own business or given financial advice, but they felt compelled to serve people who they saw were missing out.

Their aim was to turn the practice, usually targeted at wealthier and older clients, into something accessible for a younger and more diverse crowd.

The business, Fox & Hare, is now on the cusp of turning two years old. Since starting with no clients or experience, it has recently ticked over to 100 clients.

Prior to starting Fox & Hare, Mr Hare had been with Macquarie for around a decade. He departed three years into being one of the youngest directors in the company. Ms Brady on the hand has worked in financial services for 13 years, and she had been with CBA and Zurich.

“All the while my clients were financial advisers and really what I could see was, there wasn’t a great amount of choice for people who looked like me,” Ms Brady says.

“I thought most financial advisers were really gearing themselves up for wealthy pre-retiree traditional style clients and I felt with Glen, there is such a broad subset of society that really need help getting advice.

“It doesn’t make sense just to wait until you’re five years out from retirement, when you need the wealth that you’ve accumulated to go then and you need it faster. We really want to help clients much earlier in the piece.”

Both in their 30s, Ms Brady and Mr Hare target clients between the ages of 25 to 45. They also have made a point of catering to clients who have not been typical consumers in the space, welcoming young women and LGBT couples.

Ms Brady reasons the industry broadly has not done well enough in diversity, across both those giving and receiving advice.

Currently, women have been reported to make up around 20 per cent of advisers in Australia. Ms Brady describes the gap as a vicious cycle perpetuating itself.

“I think most people want to seek advice from people who look and feel like them, and that may mean that if there aren’t a lot of women giving advice, then that may put some women off actually receiving advice,” she says.

“I think that the main thing for us is, we want people to know that they are welcome irrespective of their gender, irrespective of their sexual identity, irrespective of their religion or race, and socioeconomic status to an extent. Like we want people from a whole diverse range of backgrounds to know that they won’t be judged if they come and seek advice from us.

“We want them to know that Fox & Hare is a safe space to come and get advice that’s, you know, really in their best interest, that is aligned to their goals whatever they may be, and that they’re not going to feel intimidated or overwhelmed by the experience.”

The pair have used their network for referrals, social media and events to grow their base.

“One thing that’s been amazing and probably quite surprising to the community at large is we’ve never really wanted for clients,” Ms Brady says.

“That hasn’t been a challenge. And I think that speaks to the fact that we really are speaking a different language and we really are catering to a younger demographic who didn’t know where to turn to before.”

Ms Brady says she saw a gap between traditional advice and demand from younger people for strategic and non-biased advice.

“It was a very bold move to leave a fantastic corporate role, and it was a fantastic corporate role, but it was just this burning desire to be able to help people at the coalface and really have that engagement one-on-one and know that we’re making a difference,” she says.

“It’s incredibly rewarding to be able to watch clients kind of move from, you know, that scared and anxiety-filled person at the beginning of the experience to someone who feels really on top of their financial world and knows how their strategies kind of move them towards whatever it is that they want to achieve.”

Serving tech-savvy clients

The process of giving advice is filled with friction at different points along the way. Fox & Hare uses a range of technology to combat it, Ms Brady believes more so than other practices.

One of the systems it has implemented is a goal tracking system, with daily monitoring for clients across accounts and investments in one interface. The business also doesn’t use fax lines or handwritten forms, instead asking clients to complete online forms that move directly into its CRM.

Ms Brady says old systems can be “challenging,” referring to a client’s provider, where she has been required to post original copies of paper-based information, with a five to 10 business day turn-around time.

“We’ve really just tried to think about the clients that we work with who are young, tech savvy, digitally native people, you know, they want us to interact with them in a way that they would with any other kind of provider,” Ms Brady comments.

“They expect to be able to do things online, they expect us to be able to sign documents online, they expect information can seamlessly transfer from one kind of system to another and that they could have live information on their accounts and portfolios related to goals.

“We’re just trying to create great client experiences but also remove admin burdens where we can from the back end to kind of minimise cost to serve. If we can create tech solutions that really enhance that journey for the client, just make it easier for them, then we’re definitely keen to do that.”

The technology is a tool, she says, to engage clients, keep them accountable and to motivate them to achieve their goals.

“And when I say a goal, I don’t mean, you know, I saved $10,000 or $100,000 or, you know, the traditional home, pay off your home loan,” she says.

“Whilst they are some of the financial goals, your clients get very disengaged very quickly. But if you’re able to really understand at a deeper level who is your client and what do they really truly want to achieve? And it might be that they want to pay down their mortgage so that the following five years they can spend you know, travelling Europe or you know, sending their children to a school that’s really important to them.

“You’ve really got to understand deeply what motivates the clients and then those tools become incredibly powerful.”

It is a balance, however, between understanding problems and how to solve them, creating and using the best technology solution that you can, and using it when it’s appropriate. Otherwise constantly updating tech can become disruptive to business efficiency, Ms Brady says.

“I’m always looking at new stuff, which is exciting. And I am really excited about where the industry is moving from a tech perspective,” she says.

“I think there’s a number of really interesting techs that’s coming to play and if it does what they say it’s going to do I feel like it’s going to revolutionise how we give advice and the quality of the conversations that we have.”

Giving back in investing

Social responsibility is also key to the business, both in its investing approach and its own partnerships with not-for-profits.

Fox & Hare offers ethical advice to its clients, tailored to each person’s values and goals.

In addition to offering ethical investing, the business has three charity partners it has programs with: YWCA, a not-for-profit that works to empower women through education, housing, crisis support and other initiatives, and School for Life, an organisation aiming to help Ugandan children get an education.

Mr Hare is a national partnerships manager with the third partner, LGBTIQ organisation Out for Australia. The charity helps people stay out of the closet in the workplace, who avoid being open about their sexuality because of fears around how it will affect their career.

Ms Brady has also conducted finance workshops with YWCA. She says it’s important for the business to do work aligned with its value, particularly when their clients are young and socially aware.

“I don’t know many other advice businesses that are small like us who take such a keen interest in community and charities that really align to who we are and what we believe in as well,” Ms Brady says.

On ethical investing, she notes she has to be careful in the advice she gives.

“I think the whole ethical investing space is challenging in that there is no, I believe there’s not enough robust analysis of you know, what is a green investment, is it really green? Because I see that there’s quite a bit of green washing in that not a lot of the green investments, I believe, are really true to label.

“The trend very clearly is showing that this space is becoming more and more of interest and I think it’s imperative that investment managers actually start looking at this more seriously rather than something that, you know, almost being seen as a bit cute.

“I’d like to think that if I could sit here in 12 months’ time or 24 months’ time, I will have the ability to talk about many more green and ethical investment strategies, but at the moment I am limited to what the market has.”

 

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How to boost your home’s earning potential

Jess chats to 9Honey to provide insight on what to consider when renting out your home or investment property.

With the explosion of the sharing economy in recent years, many people have jumped at the chance to rent their home or investment property out in return for strong short-term income. If you are going on holiday, or you’ve purchased a holiday home, you might be considering doing the same.

You certainly wouldn’t be alone. According to analysis by ACIL Allen Consulting, the number of nights of accommodation booked in an Australian short-term rental has increased by 26 per cent in recent years. The same report reveals that holiday homeowners earned $1.9 billion in 2017/18.

But before you join the stack of savvy Australians making cash from their own homes, make sure you’ve factored in the upfront costs and set yourself up for success before handing over the keys to guests.

Short-term gains

Generally, short-term holiday stays attract rental figures that are higher than a long-term private rental. Sydney, for example, has an average nightly rate of $350 per night in peak season, according to property listing platform Stayz.

That means you can rent out your home for short periods when there’s strong demand, such as Christmas and Easter, while enjoying the property for yourself at other times.

It’s important to remember, though, that the money you earn could be taxable. However, according to financial advisor Jessica Brady, making income from your home can still be great, even if you have to pay tax.

“Make sure you know what impact it will have on your tax (including any potential capital gains taxes when you sell),” she says.

It’s hard to predict the final figure as each person’s situation is different, but the ATO provides some examples as a guide. Again, talking to a financial advisor or tax accountant can help you prepare.

Comfort and style

It’s possible to earn great regular income when you list your property on a short stay site, but keep in mind it’s someone’s holiday so you want to make sure your property is welcoming.

That means you’ll need to provide comfortable bedding, household furniture and other creature comforts that help your listing stand out from the rest, attract positive reviews and generate a good nightly fee.

You may be able to claim some of the costs associated with the furniture as well as the cleaning and any meal provisions you supply, so check with your accountant before splashing out to see if you’re able to recover at least some of your costs.

Long-term winning

The great advantage of short-term rentals is you’re able to cut out the real estate agent and administration, plus you get to vet your prospective guests and communicate with them before they arrive so you can ensure they’re reliable and will be respectful of your property. As for all that bonus cash you’ll have coming in? Brady recommends solid planning around what you’re going to do with it.

“While it is fun to have extra play money, is there a goal you are working towards that can be achieved faster if you put it towards that? Is there a big-ticket item that you have been wanting? Make the money work hard for you.”

By Nicole Haddow | 9Honey

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The 50 Most Influential Advisers in Australia

We are SO excited to be recognised as one of the 50 most influential advisers in Australia by the Financial Standard!! 👏🏻🏅🎉

It’s been such an exciting year for the Fox & Hare Financial Advice family and we can’t wait to work with our incredible clients to continue to smash goals in 2020 👊🏻

#FSPower50 #notyouraveragefinancialadviser #financialadvisers #leadersinfinance #financialindependence

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Advice for the Next Generation

Jess and Glen sat down with IFA Australia to share the Fox & Hare journey and how they advise their millennial clients in the current climate.

 

JUST BEFORE the royal commission began, two ex- Macquarie financial services workers decided to start their own advice business in Surry Hills, Sydney. Neither Jessica Brady nor Glen Hare had ever operated their own business or given financial advice, but they felt compelled to serve people who they saw were missing out. Their aim was to turn the practice, usually targeted at wealthier and older clients, into something accessible for a younger and more diverse crowd. The business, Fox & Hare, is now on the cusp of turning two years old. Since starting with no clients or experience, it has recently ticked over to 100 clients. Prior to starting Fox & Hare, Mr Hare had been with Macquarie for around a decade. He departed three years into being one of the youngest directors in the company. Ms Brady on the hand has worked in financial services for 13 years, and she had been with CBA and Zurich.

“All the while my clients were financial advisers and really what I could see was, there wasn’t a great amount of choice for people who looked like me,” Ms Brady says.

“I thought most financial advisers were really gearing themselves up
for wealthy pre-retiree traditional style clients and I felt with Glen, there is such a broad subset of society that really need help getting advice.

“It doesn’t make sense just to wait until you’re five years out from retirement, when you need the wealth that you’ve accumulated to go then and you need it faster. We really want to help clients much earlier in the piece.”

Both in their 30s, they target clients between 25 and 45. They have also made a point of catering to clients who have not been typical consumers in the space, welcoming young women and LGBT couples. Ms Brady reasons that the industry broadly has not done well enough in diversity, across both those giving and receiving advice. Currently, women have been reported to make up around 20 per cent of advisers in Australia. Ms Brady describes the gap as a vicious cycle perpetuating itself.

“I think most people want to seek advice from people who look and feel like them, and that may mean that if there aren’t
a lot of women giving advice, then that may put some women off actually receiving advice,” she says.

“I think that the main thing for us is, we want people to know that they are welcome irrespective of their gender, irrespective of their sexual identity, irrespective of their religion or race, and socioeconomic status to an extent. Like we want people from a whole diverse range of backgrounds to know that they won’t be judged if they come and seek advice from us.

“We want them to know that Fox & Hare is a safe space to come and get advice that’s, you know, really in their best interest, that is aligned to their goals, whatever they may be, and that they’re not going to feel intimidated or overwhelmed by the experience.”

The pair have used their network for referrals, social media and events to grow their base.

“One thing that’s been amazing and probably quite surprising to the community at large is we’ve never really wanted for clients,” Ms Brady says.

“That hasn’t been a challenge. And I think that speaks to the fact that we really are speaking a different language and
we really are catering to a younger demographic who didn’t know where to turn to before.”

Ms Brady says she saw a gap between traditional advice and demand from younger people for strategic and non- biased advice.

“It was a very bold move to leave a fantastic corporate role, and it was a fantastic corporate role, but it was just this burning desire to be able to help people at the coalface and really have that engagement one-on- one and know that we’re making a difference,”
she says.

“It’s incredibly rewarding to be able to watch clients kind of move from, you know, that scared and anxiety-filled person at the beginning of the experience to someone who feels really on top of their financial world and knows how their strategies kind of move them towards whatever it is that they want to achieve.”

 

Serving tech-savvy clients

The process of giving advice is filled with friction at different points along the way. Fox & Hare uses a range of technology to combat it, Ms Brady believes more so than other practices.

One of the systems it has implemented is a goal tracking system, with daily monitoring for clients across accounts and investments in one interface. The business also doesn’t use fax lines or handwritten forms, instead asking clients to complete online forms that move directly into its CRM. Ms Brady says old systems can be “challenging”, referring to a client’s provider, where she has been required to post original copies of paper- based information, with a five to 10 business day turn- around time.

“We’ve really just tried to think about the clients that we work with who are young, tech-savvy, digitally native people, you know, they want us to interact with them in a way that they would with any other kind of provider,” Ms Brady comments.

“They expect to be able to do things online, they expect us to be able to sign documents online, they expect information can seamlessly transfer from one kind of system to another and that they could have live information on their accounts and portfolios related to goals.

“We’re just trying to create great client experiences but also remove admin burdens where we can from the back end to kind of minimise cost to serve. If we can create tech solutions that really enhance that journey for the client, just make it easier for them, then we’re definitely keen to do that.”

The technology is a tool, she says, to engage clients, keep them accountable and to motivate them to achieve their goals.

“And when I say a goal, I don’t mean, you know, I saved $10,000 or $100,000 or, you know, the traditional home, pay off your home loan,” she says.

“Whilst they are some of the financial goals, your clients get very disengaged very quickly. But if you’re able to really understand at a deeper level who is your client and what do they really truly want to achieve? And it might be that they want to pay down their mortgage so that the following five years they can spend, you know, travelling Europe or sending their children to a school that’s really important to them.

“You’ve really got to understand deeply what motivates the clients and then those tools become incredibly powerful.”It is a balance, however, between understanding problems and how to solve them, creating and using the best technology solution that you can, and using it when it’s appropriate. Otherwise constantly updating tech can become disruptive to business efficiency, Ms Brady says.

“I’m always looking at new stuff, which is exciting. And I am really excited about where the industry is moving from a tech perspective,” she says.

“I think there’s a number of really interesting techs that’s coming to play and if it does what they say it’s going to do I feel like it’s going to revolutionise how we give advice and the quality of the conversations that we have.”

Giving back in investing

Social responsibility is also key to the business, both in its investing approach and its own partnerships with not- for-profits. Fox & Hare offers ethical advice to its clients, tailored to each person’s values and goals. In addition to offering ethical investing, the business has three charity partners it has programs with: YWCA, a not-for- profit that works to empower women through education, housing, crisis support and other initiatives, and School for Life, an organisation aiming to help Ugandan children get an education. Mr Hare is a national partnerships manager with the third partner, LGBTIQ organisation Out for Australia. The charity helps people stay out of the closet in the workplace, who avoid being open about their sexuality because of fears around how it will affect their career.

Ms Brady has also conducted finance workshops with YWCA. She says it’s important for the business to do work aligned with its value, particularly when their clients are young and socially aware.

“I don’t know many other advice businesses that are small like us who take such a keen interest in community and charities that really align to who we are and what we believe in as well,” Ms Brady says.

On ethical investing, she notes she has to be careful in the advice she gives.

“I think the whole ethical investing space is challenging in that there is no, I believe there’s not enough robust analysis of, you know, what is a green investment? Is it really green? Because I see that there’s quite a bit of green washing in that not a lot of the green investments, I believe, are really true to label.

“The trend very clearly is showing that this space is becoming more and more of interest and I think it’s imperative that investment managers actually start looking at this more seriously rather than something that, you know, almost being seen as a bit cute.

“I’d like to think that if I could sit here in 12 months’ time or 24 months’ time, I will have the ability to talk about many more green and ethical investment strategies, but at the moment I am limited to what the market has.”

 

– Article written by Sarah Simpkins for the IFA 18/09/19.

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3 Steps to re-ignite your financial flame

Glen sits down with Urban Village to identify the impact finances can have on a relationship and uncover the 3 steps to re-igniting your financial flame.

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Is your workplace looking after financial wellbeing?

So your workplace has embraced the importance of mental wellbeing and physical activity in the office, however are they proactive in managing your financial stress and in turn financial wellness? Through an interactive discussion, Fox & Hare share practical advice to build a strong money mindset, in order to gain financial wellness. The demand for these types of workshops has been driven by an increasing number of organisations viewing ‘wellness’ as a broader conversation.

Here’s what Matt Lippiatt, Head of Retail Sales and Rachel Towell, State Manager NSW/ACT from MetLife had to say after we had a chat with their teams.

Matt Lippiat
Head of Retail Sales at MetLife
“Jess is a legend. I’ve known her for many years and she is as passionate as they come in regards to helping people get on top of their finances and realise their goals. We recently hosted her at MetLife as part of our Wellness Week and the workshop she ran for our people was extremely well received. She’s a great communicator and I have no hesitation recommending her.”

Rachel Towell
State Manager NSW/ACT at MetLife
“Jess and Glen recently spoke at the MetLife staff Wellness Week talking about Financial Wellness. The session was relevant to the audience, interactive and engaging but mostly it was presented in a way that made the topics really easy to relate to and understand. Well done Fox and Hare team you are certainly doing things differently.”

Book in a 15min chat 📲 if you’d like to learn more about the impact of financial wellness.

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How do I choose a good adviser?

The Fox sits down with NestEgg to answer the top FAQ’s when choosing a good adviser 👇✅

One of the last taboos in modern society is to discuss the ones and zeros in our bank accounts. As a society, we avoid having that conversation with loved ones, so why should someone discuss their situation with an adviser?

Nest Egg sat with Jessica Brady, co-founder of The Fox and The Hare, to discuss how to choose a financial adviser and the importance of long-term planning.

What is a financial adviser?

According to ASIC, an adviser is a person or authorised representative of an organisation licensed by ASIC to provide advice on some or all of these areas: investing, superannuation, retirement planning, estate planning, risk management, insurance and taxation.

What makes a good financial adviser?

“[Someone who is] able to talk to people in terms that makes sense to them. A good adviser will make sure the plan is really understood,” said Ms Brady.

What are the warning signs of a bad financial adviser?

“Someone who doesn’t feel right… Someone who hasn’t asked the right questions and someone who doesn’t explain things clearly but makes you feel intimidated, overwhelmed or confused perhaps is the worst adviser,” explained Ms Brady.

When should I engage a financial adviser? 

One in three Australians wakes up feeling stressed about their financial situation and almost half of Australians do not have very much in savings, according to Ms Brady. With this, the sooner an individual seeks out financial advisers the better, regardless of their current financial situation.

“What we know is people tend not to get financial advice until really close to retirement, and [they] have lost the beauty which is time,” said Ms Brady.

What questions should I ask?

The most important part of a financial adviser’s role is to openly and honestly communicate the long-term strategy. It is important that both the financial adviser is aware of the goals of the client and that the client completely understands the advice they are being presented.

“If you don’t understand something, you must ask questions. If something doesn’t make sense to you and is put in front of you from an advice perspective, do not sign off on that advice until you ultimately understand what it is and why it makes sense for you… There’s no silly questions when it comes to financial advice,” said Ms Brady.

How long should I keep a financial adviser?

The goal of financial advisers is to match the planning of its consumers, whether that is an investor who wants to purchase a property 12 months down the track or a 25-year-old who wants to plan for retirement. With this, a good adviser will match the time frame and present a range of options to help their client achieve a goal, according to Ms Brady.

“It depends on the goal of the client. If someone wants to buy a property in the short term or if someone has really long-term aspiration or superannuation for a younger Australian, what we do as advisers is profile the goal and work out what’s the time horizon of the goal and how much money is required,” said Ms Brady.

“We shouldn’t just do one risk profile for a person in totality because people have got lots of different goals that require different strategies to achieve them, that they should have simultaneously in my view,” said Ms Brady.

What’s your final advice? 

Ms Brady believes it is vital to make sure the client knows that they are in control and that they sign off on all deals. Clients should trust the adviser and discuss the pros and cons of how the strategy could work, but ultimately need to make the financial decision.

“At the end of the day, if something goes terribly wrong, it’s your money that is going to be impacted,”

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What is ethical investing and should you consider it?

What is ethical investing?

Increasingly I’m helping clients invest in a way that aligns with their core values – ethical investing. The challenge is that nothing is clear cut – core values are inherently personal and therefore how individuals wish to ethically invest differs. What does ethical investing mean to you?

Why is it important?

Simply put, the more people who choose to support companies promoting a positive social, environmental and humanitarian change, the more pressure it puts on organisations to embrace these ethical values.

Does doing the right thing come at a cost?

There is often a preconceived notion if you invest ethically you have to forgo performance. The good news is this isn’t necessarily the case. The 2018 Responsible Investment Benchmark Report found that the responsible Australian share funds outperformed the average fund over 3,5 & 10 years. It’s a similar story for responsible international share funds. The result is predominately being driven by the next generation of the progressive investors – the more we invest in environmentally and socially progressive companies, the more revenue, profit and shareholder return!

What can you do?

Consider what’s important to you and the social and environmental impact you wish to make. Then carefully examine the companies you’re regularly investing in and determine if they coincide with your ethics. This could be anything from where you get your morning coffee, the fashion labels you regularly buy or where your employer is paying your super every month.

Then ask yourself 3 questions:

  • Where is your money actually going?
  • Are the companies you’re supporting staying true to your values?
  • Could your money be working harder for you and the greater good?

Glen hare is one half of Surry Hills based financial advice firm Fox & Hare 🦊🐰

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EOFY Wine + Wisdom

What better way to kick off the new financial year than with our favourite event series, Wine + Wisdom! 🍷🤯

Our 🦊& 🐰together with the amazing Brendan Dixon from Pure Finance, shared their tips on how to get on track with personal finances and property plans whilst Wyno provided the best drops from their beautiful wine selection.

Think you may like attend future events in this series? We’d love to have you! 👋Get in touch via: admin@foxandhare.com.au

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Freedom, Choice & Flexibility – The Trifecta

The Hare sits down with Money and Finance Magazine to discuss the desired life trifecta; Freedom, choice and flexibility.

When reflecting on the many conversations shared with both clients at Fox and Hare or the immeasurable number of friends, family and acquaintances who are always looking for advice; I’ve discovered three little words that make up the lions share of people’s aspirations: freedom, choice and flexibility. I’ve learned that the modern corporate crusader has little interest in climbing the corporate ladder just for the sake of it. And I’m now fairly (99.5%) certain that nobody is out there enduring the desk-bound drudgery of the average 9-5 just for the hell of it.

While partaking in these conversations and reflecting on them afterwards, I’ve arrived at what can only be described as quite a disturbing conclusion. Everyday millions of people are waking to the sounds of alarms, battling the daily commute and heading downtown to sacrifice their freedom, choice and flexibility in order to achieve freedom, choice and flexibility. It’s the true paradox of the modern workplace, a glitch in the matrix if you will. And I regret to inform you that these sacrifices alone will not be sufficient. If you (like my clients and acquaintances) are searching for the unicorn trifecta of freedom, choice and flexibility, you’re going to need a passive income.

I’ve heard of passive income, but what actually is it?

In short: income generated from means other than personal exhaustion! Examples include but are by no means limited to the rents from investment properties, dividends on shares or the interest from high interest savings accounts. You should think of passive income as the sherpa on the journey from wage slave to free time connoisseur. Sadly I can’t squeeze the ‘Passive Income for Dummies’ guide into an article appropriate word count but I can ask and (help answer) the four questions that I consider integral when launching the hunt for this particular prize. Let’s go. 

  1. How much is enough?

So how much passive income do you actually need? Obviously the answer varies significantly from one person to the next and ‘enough to sip Pina Colada’s in the Maldives for the rest of my life’ is not a real answer. The simplest way to approach this question is to first calculate how much you need to cover fixed costs (bills, rent, etc) every year. Set this number aside and determine (again annually) how much cash you’ll need for life’s little pleasures (eating out, clothes, etc). Finally, you’ll need to establish how much you’re looking to splash every twelve months on bigger ticket items (holidays, lifestyle purchases, etc). Looking at these three areas will give you a good picture of the figure you should be working towards. If you want to put some crude numbers around a target to work towards, investing $1,000,000 returning 6% will provide you with $60,000 of passive income a year without eating into the initial investment.

  1. What’s the most common problem when getting started?

Ironically, when we’re working toward long term gratifications, it’s the short term ones that will trip us up. For you to achieve that sense of freedom, enable choice and embrace flexibility, a degree of structure, discipline and consistency is required. In the absence of a structured game plan, it’s very difficult to achieve the goals you set yourself. It’s challenging to envisage the impact of eating out twice a week instead of once, taking food to work vs. buying it every day or purchasing a new pair of shoes every 6 months instead of monthly. But you should consider the consequences of satisfying an insignificant urge. Are all those extra dollars costing you something that is truly important?

  1. When is the perfect time to start?

NOW! but also never. Money is emotional and the relationships with it can vary wildly from person to person. What may seem logical to one may not to another and the sense of being overwhelmed when considering all the options is all too common and more than acceptable. What’s not acceptable, however, is putting off action due to laziness, option paralysis or fear. Create a strategy that aligns to your goals and be confident that implementing all of the various steps will move you forward. Add discipline, structure and adhere to a consistent method for best results. If investment strategies are just not your forte, you really can not be bothered to work it all out or just plain old CBF seek the help of a professional. Babies will be born, storms will hit and life is just not going to slow down with those curveballs. The time will never be perfect, so why not just start now?

  1. Is your super pulling its weight?

It’s a slight deviation from passive income but with longer turn goals front of mind, it’s really important that you get your super sauce bubbling away as soon as possible. Given that you’re unable to touch it until you’re sixty-seven your investments will have a long time to marinate. Every superannuation account has two key ingredients that you should never forget! Compounding interest and tax concessions. But what are they and why should you care? Compounding interest (described by Einstein as the 8th wonder of the world) is the re-investment of generated income, which in turn generates more income, to be re-invested and generate yet more income. Tax concessions are reductions in your annual tax liability. Provided by the government to help the population remain financially independent well into their twilight years they can be highly effect tools in your tax reduction arsenal. Bearing in mind that your superannuation account could be the knight in shining armour when it comes to long term freedom are you sure that you’re paying enough attention?

In order to be truly free, have the flexibility you desire and the choice to live the life you aspire, you’ll ironically need a degree of structure and discipline. Set yourself realistic, specific and measurable goals and formulate a game plan to ensure success. Above all, Take Action! An inch of movement will bring you closer to your goals than a mile of intention (Dr Steve Maraboli).

By Glen Hare

Want to start your journey to achieve the trifecta? 👐 Reach out here ↩️

Got some random letter from your Super fund about insurance cancelling? Here’s your need to know guide! 1024 683 Fox & Hare

Got some random letter from your Super fund about insurance cancelling? Here’s your need to know guide!

If you are like most people, you start a new job and forget to give them your existing Super fund info… so they set you up with their default fund. You are busy getting into your new role only to find years down the line you have a small army of Super funds. All charging you fees.

The Government has recently passed some changes to make sure your future retirement savings doesn’t get eaten away with admin fees and insurance premiums. Aptly named the “Protecting Your Super” legislation, its effective 1 July 2019 so now Australia Post is busy delivering thousands of letters from Super funds they had completely forgotten about telling them their account is inactive or that their existing insurance may expire (let’s hope they have your correct address!). Most people will throw out their letters without any care or concern because Super is future you’s problem and you have other things on your mind. Before you do though, here are the high level deets:

The Government wants to stop every man and his dog taking your Super money by way of fees and insurance. If you haven’t made a contribution for 16months, it will be classed as ‘inactive’.

If it is classed as ‘inactive’, and, you have insurance attached (this is either cover that you are given as part of being a member, or, retail insurance cover that’s paid via your Super fund) you may find it ends up being cancelled unless you notify the Super fund otherwise. You need to opt in before the 1st of July 2019 so don’t wait for a rainy day before you get to it (wouldn’t want global warming preventing you from keeping insurance you determine you need!).

All superannuation accounts will be transferred to the ATO if:

  • Your account balance is less than $6,000,
  • You have no life insurance held in the account,
  • You haven’t met a condition of release, and
  • the account has been inactive for a continuous period of 16 months

What Fox & Hare make of all this:

Look, the premise is sound. Let’s not have your future retirement savings completely decimated by fees and insurance, but, and it is a big one… there are a few reasons why you may want to keep your fund and associated insurance alive. It might be that you have a health issue that means getting new insurance is a no-go, or you have changed jobs to a role that is considered too risky or you’ve become self-employed and haven’t made any super contributions… or you have had a period out of the workforce (to have a baby, study or sit on a foreign beach sipping pina coladas) which means you may not have an income to support getting income protection. All of these may mean its sensible for you to keep a small amount in your old fund and keep that insurance alive and well.

So, what to do?

Read the letters! Understand what Super and insurance you have (get advice if it’s all too hard and you need help), determine what you would need if something happened to you and if that means you are over insured or under insured and act accordingly (remember, if you do want to keep it you need to call and follow their opt in process – noting each fund has a different process). If you find yourself in a situation where you haven’t had any contributions go into your account for over 12months you may wish to consider making a contribution, so your account isn’t classed as inactive. You may want to think about consolidating all of your accounts into one (again, do some research on which is best). And, if it’s all too much and life admin isn’t your forte, we are happy to help, reach out here!

You can find more info here.⬅️

Any information in the above article is general advice only. You should consider your circumstances or reach out 📲 if you would like to discuss your individual needs.

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The Final Taboo: What is Normal When it Comes to Money?

Whether you’re saving for a house, starting a business, or looking ahead to retirement, money is on everyone’s mind.

Hub Australia sits down with Fox and Hare to gather insight into 21st-century financial advice and how the industry has changed.

q. What is the question you get asked most from clients?

Is this normal? I think money is probably the last taboo. People have no idea whether their financial situation is similar to everyone else’s, so I get asked a lot of ‘is it normal that I’ve got this amount of credit card debt or personal loans or this amount in savings’ because people don’t talk about it. It means Fox & Hare act as a kind of secret gateway into what everyone else is doing financially

People who aren’t clients yet and are interested in what we do ask us more about ‘what is a financial adviser?’ and ‘would I need financial advice because I don’t have any money?’ We spend a lot of time demystifying what financial advice is. It can sometimes be daunting or overwhelming, but we want to make it fun and for people to know financial advice is not just for old rich people, it’s for young people so that they engage in planning and get set up for success.

q. Is part of your business model to be accessible to the millennial market?

Absolutely. That’s what’s different about us. Our client base is very different to traditional financial advice firms – our youngest client is 23, our oldest clients are nearing 50. The average age of a financial adviser in Australia is around 55 years old, and they tend to work with people in a similar demographic to themselves. We’re not the same as the financial advisers of older times, who were likely working for an agent or a bank selling insurance. They’re more into retirement planning and superannuation, and even though we help with retirement planning, we’re more interested in helping people reach their goals.

If you want to travel every year, how do we make sure you’ve got a budget to do that? How do you buy your first house? It’s a different conversation opposed to ‘how do we boost your retirement?’, which is unsexy to our demographic. There’s a misconception that financial advisers are going to make you have a budget where you don’t get to do anything fun – that’s not our belief. It’s about balancing achieving your short and medium-term goals and planning for long-term stuff as well.

q. Do you think financial advice is something everyone could utilise?

I think financial advisers have done a rubbish job by promoting financial advice as exclusively for old rich people. I really truly believe that everyone has financial goals like getting out of debt or saving, starting a business, or buying a house. Most people just need a plan, otherwise, it’s very easy to get off-course.

I think financial advice is really relevant for anyone that has goals. A lot of what we do is behavioural coaching because this concept of Ying and Yang within relationships comes out all the time with money – people’s money behaviour is innately within them.

q. What did you learn about money growing up? What did your parents teach you about money? How do you feel about money?

Some people hate money and have a really negative connotation. Some people are enamoured with the idea that ‘I’m going to be rich and it’ll solve all my problems’. We work out how we can get people aligned because otherwise people’s money behaviours really conflict, and it can create tension.

It can be really interesting around how we help people move forward better as a couple, and that’s good when we’re working with millennials because you’re working with newer couples. When you’ve been together for 50 years and you’re undoing half a century of money habits it’s a much bigger journey.

q. Why did you choose to grow your business in a co-working space?

Sydney has a new wave of small businesses, and it’s so important to know that you don’t have to forego all the wonderful things big businesses have just because you don’t have the scale. Co-working means you’re able to band together and access the same quality for less.

Book in for a 15 minute call 🤳 with 🦊 & 🐰.

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The federal election’s potential impact on property investors

Kellie Landrey Principal Buyers Agent at Scoutable, shares with the Fox and Hare crew the potential impact of the pending federal election on aspiring property investors.

With many news outlets and polls expecting Labor to win, their proposed policy changes will have a potential impact on the property market. 🏠

Negative Gearing

According to news.com.au, 1.3 million people or 10% of taxpayers use negative gearing to claim a tax break.

Negative gearing is when the interest on the loan is higher than the net rental income, meaning the investor is making a loss. The loss is claimed as a tax deduction. The net rental income is the rental income minus the expenses associated with owning the property, such as maintenance, management and depreciation.

For example, your loan interest repayments are $30,000 per annum and you have $5,000 per annum of property expenses. If your rental income is $20,000 per annum, this gives a loss of $15,000. This means you can reduce your taxable income by $15,000. For someone who is earning $100,000 per annum, their taxable income will now be $85,000 per annum. You will reduce your tax payable and save just under $6,000.

Labor is proposing to remove the right to claim these losses (negative gearing) to all established properties from 1 January 2020 (new build properties not affected). Any investment property purchased prior to 1 January 2020 will continue to be able to claim negative gearing.

Capital Gains Tax

When you sell your investment property you are required to pay tax on the profit.

Capital gains tax does not apply to your principal place of residence.

Currently, the capital gains tax rule provides a 50% discount (as long as you have owned the property for one year). For example, you purchase an investment property for $1,000,000 and sell it over one year later for $1,200,000, your profit is $200,000. Applying the 50% discount, you must add $100,000 to your taxable income in the financial year that you sold the property. Labor proposes to reduce the discount from 50% to 25%. Following the above example, you will add $150,000 to your taxable income.

Any investment made prior to 1 January 2020 will remain at the 50% discount rule.

With the possibility of a labor win, it may be a good time to consider investing before 1st January 2020.

If you would like to discuss negative gearing or capital gains tax further, book in a coffee with Fox & Hare ☕. To learn about Scoutable’s services and how they can assist with your property search, click here.

 

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Why get insurance when young and healthy?

F&H client shares their experience when lodging an insurance claim ⤵️

1. Any type of insurance is a bit of a begrudging purchase, what were your thoughts when I initially brought up the topic?

To be honest, I was a bit reluctant. At the time it seemed expensive, and I didn’t see the immediate benefit. It felt like something I didn’t need. Like you say, it’s quite a begrudging purchase, and it’s quite a boring one too. Most people would rather spend their money on something fun, like a holiday!

2. Why did you end up taking out the recommended cover?

In the end we took the view that it’s something you’re better off having in case you need it, rather than the other way round. Turned out, we were right!

3. You recently had a claim, do you mind sharing what the claim was for?

Over the Christmas holidays I was cycling with my father in law. We were heading down a hill at a pretty decent speed, and a car pulled out of a T junction on my left. He hadn’t seen me. I went straight into him and ended up with multiple breaks on my left hand side and a punctured lung.

4. Were there any unexpected costs that came up as a result of your injuries?

Mostly it was the cost of not being able to work. I required follow-up treatments and physiotherapy sessions, so there was a fairly big cost there. Then there were other costs which you initially don’t think of – travel to and from appointments, medical stuff like heat packs, ice packs, weights and equipment for rehab work. I’ve also had to take up swimming, so additional gym memberships are another.

5. Did you initially think that getting a claim paid was going to be a difficult process? How did your experience contrast or confirm this thought?

Yes, I was expecting a lot of back and forth, having to prove the extent of my injuries and that I wasn’t at  fault for the accident. It turned out to be pretty simple, the doctors filled out some forms, I submitted some payslips, and Glen did the rest! I received my benefit payment quickly, too.

6. When big things happen to people, often friends and family don’t really know what to do or say. From your experience, what tips would you give to people who want to help out in a time of need but don’t know where to start?

That’s a big question. I think everyone is different in that regard, but for me it was nice to receive messages or small gifts just to show that people cared and were thinking of you. F&H sent me a nice gift pack with chocolate and vitamin drinks! Some people sent flowers and even books to read off Amazon, which was very thoughtful. An accident like I had changes your perspective very quickly and it sparks change in your life. One of the biggest things I will be mindful of in the future is how long lasting the consequences of something like that can be on someone.

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How to book your dream holiday AND kill all of your financial goals in 2019

The Hare features in the latest edition of Urban Village to share his tips for killing your financial goals AND booking your dream holiday.

Is booking and lavishing yourself with your dream holiday the same as buying property or retiring early? Of course it is! Whether you’re looking to create your likeness in gold bullion, put the kids through private school or buy a seat on the inaugural Virgin Galactic space flight you can be certain that, in theory, the goal setting process is just as familiar as imagining, booking and enjoying your dream holiday.  

Follow these three simple steps to envision, enact and enjoy your wildest dreams! 

  1. Dream up (and write down) the ideal destination for you.   

Nobody books a holiday to a place they don’t want to go. Goal setting should be exactly the same! You wouldn’t choose a holiday destination ‘just because’ and there is no reason why your financial destination should not be the same. Dream up your ideal scenario, somewhere that you’re certain you will be happy and go for that! Whether that be home ownership, early retirement or a Mariah Carey sized closet full of Jimmy Choo’s, envisage it, own it and count down the days until you’re there enjoying it.  

  1. Break It Down Into Baby Steps 

The process of transferring our dreams and aspirations from an idea to reality is never an easy one. We don’t just wake up one day in Tokyo! Before we can even think about that steaming bowl of ramen in Shinjuku, we’re charged with working out how to actually get from our comfortable Surry Hills digs to Japan. There is annual leave to consider, the funding of the project and wrangling the schedules and needs of anybody else who might be joining us. Just like waking up in Tokyo, waking up in your own home (or Mariah sized shoe closet) is unlikely to ever happen without meticulous planning. Once you’ve envisaged the destination, break it down into manageable steps, read how other people have done it and formulate a plan that’s going to work for you.  

  1. Execute the plan with military precision

Admittedly, transit is never as enjoyable as the final destination but that doesn’t mean the journey is any less exciting. There is the monotony of counting down the days, the screaming terror of realising that the traffic on O’Riordan St might actually cause you to miss your flight this time, arduous security lines and the list goes on. For better or worse, life is extraordinarily unpredictable and things can change in a heartbeat. The only constants are you and your attitude toward getting things done. When you’ve got a clear plan to follow and you do in fact follow it, only the most heinous of circumstances can slow you down. Don’t worry about the snarling traffic, overzealous airport security and shameful people standing two abreast on the escalator. You’ve got a plan, just stick to it! You’ll touch down in no time.  

Those that have goals succeed, because they know where they are going  

Want to chat about your goals? 🙌 Book in a free coffee with us today ☕

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Can you achieve financial freedom in your 20’s?

Jess and Glen share their golden rules for creating financial freedom in your 20s with Lucinda Starr:

  1. Pay yourself first
  2. Consider your investment options
  3. Create a plan, and be prepared to adapt
  4. Find someone to hold you accountable

At Fox & Hare, we specialise in helping Millennials create an attainable savings plan, set clear goals and as a result, regain control of their money.

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The top 3 financial mistakes lawyers make

The Hare discusses on Lawyers Weekly, the top 3 financial mistakes lawyers make:

  1. Doing nothing – The fear of making the wrong choice is real and most often presents itself as the statement ‘I just don’t know where to start’.
  2. The more you earn, the more you spend –  Even when there are an extra four or five zeros at the end of the pay cheque there still seems to be nothing left at the end of the month.
  3. Not spending money on what’s really important – It’s really important to align an investment or cashflow strategy to a particular goal. These goals range from the mild, like buying a home, paying for private education for the kids and travelling the world to the unadulterated and wild.

Many lawyers don’t know where to start when it comes to managing their money. Some are waiting for a sign, others are looking for the perfect moment and many believe they’re too strapped for time to finesse finance as well as law. Whatever the poison, the outcome is the same.

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Who we work with 👥

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Call to celebrate inclusivity of LGBTI community

Glen speaks to Tahn Sharpe from Professional Planner about how advisers should be taking the opportunity to celebrate their inclusivity and review the way they interact with their LGBTI clients. Glen and Jess believe advice firms don’t need to be explicit in their support for the LGBTI (lesbian, gay, bisexual, transgender and intersex) community, but would be well-served by conveying an inclusive outlook.

“You don’t have to say that you want to work with LGBTI people on the homepage of your website,” Glen says, “but make sure that someone who was part of that community would know that you work with anybody, regardless of their orientation or background.”

“The way we position our business is to ensure that we’re inclusive of everybody in the community regardless of gender, sexual orientation or ethnicity,” he explains. “Financial advice is personal and people want to ensure that they’re coming through a non-judgemental environment.”

The inclusivity issue is one Glen says extends to staff and clients. He works extensively with Out for Australia – a group whose mission is to provide role models and mentors for “aspiring LGBTI professionals” ­– and wants to encourage people to feel confident in bringing their “whole selves” to work.

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