Managing Mortgages And Super Funds

Photo: atfconsult.com

Schools teach children all kinds of valuable information. Maths, Physics, Literature, Accounting. However, very few schools teach anything about financial management. Is it any wonder that people have so many financial problems?

Self Managed super funds

These funds can be very hard to manage. Accountants love these because they can charge you a lot for their help. They are quite technical and you have to do a lot of administrative work yourself. If you have one of these funds and your partner passes away before you do, the paperwork can be complex, a big headache. Unless you have excellent administrative skills, I will usually not recommend them.

A generally good super fund

One fund worth considering is the Hostplus Index Balanced Fund.

It invests in the 1500 largest companies (including Apple, Facebook, Nestle), and is 75% growth and 25% defensive. This fund has outperformed many others over the years.

Also, the fees are very low. As you all know, banks and financial institutions live on fees, including many you don’t even know about. Anyone who has a credit card knows what I’m talking about.

Mortgage

Mortgage comes from a French word meaning “debt till the end of your life”. So think about all the factors. You need to save at least 20%, otherwise you need mortgage insurance, and this is expensive. Bank payments should never be more than 50% of your income. Financial stress is what usually rips families apart.

Buying a property with friends

Ask yourself, will they still be your friends 20 years later? Things change, life changes, and unless you can pay off the property in a short time, it can get complicated.

Buying a property with your parents

This can work, but if the parents don’t have an income or if they pass away, you’ll be in trouble.

Best investment advice

Buy a really, really good pillow, an expensive one. Your head is sleeping 33% of the time. A bad pillow will ruin your life. Bill Gates is the richest man in the world, but he still needs to sleep on a pillow just like you.

For any other questions, feel free to emailanthony1976007@gmail.com.

Tony Trinh