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Important Legal Information
 Nicole Heales is an Authorised Representative of Capstone Financial
Planning Pty Ltd (Capstone). Capstone holds Australian Financial Services
Licence (AFSL) No. 223135.
 Nicole Heales is a Credit Representative of Crown Lending Pty Ltd
(Crown). Crown holds Australian Credit Licence (ACL) No. 388279.
 The advice provided in this presentation is general advice only. General
advice is defined as advice that has been prepared without taking into
account your objectives, financial situation and needs. Before acting on
the advice, you will need to consider the appropriateness of the advice,
having regard to your objectives, financial situation and needs. If the
advice relates to the acquisition, or possible acquisition, of a particular
financial product, you should obtain a Product Disclosure Statement
(‘PDS’) relating to the product and consider the PDS before making any
decision about whether to acquire the product. Whilst every care has
been taken to ensure the accuracy of the material presented, Capstone,
Crown and their authorised representatives will not accept any liability for
any errors or omissions in the information provided.
Talking About
 Consumer debt
 Mortgages
 Insurance
Credit Card Debt
11% to 21%
 $32 billion owing
 $4,300 per card holder average
 $700 in interest per year
 Minimum repayments will take 31 years
 Cost $14,900 in interest
 $216 each month debt paid off in 2 years and
save $9,700 in interest
 $50 week gets back 29 years plus $10,000
False Economy
 Money in savings account and debt
 Interest earned ALWAYS less than interest paid
 Pay tax on interest earned
 Keep 3 months living expenses
 Pay down your debt
Personal & Car Loans
8% to 15%
 Save first then buy!
 24 to 36 months interest free deals – be careful
 Shortest loan possible
 Longer the term the more you pay
 Second hand car
 End of calendar year run out sales
Credit Card Reduction
 Don’t ignore it
 Stop using
 Debit cards
 Transfer credit card balances to lowest rate
 Pay highest interest rate loan first
 Payments greater than the minimum, always
 Snowball effect
Mortgages
 Don’t buy a house you can’t afford
 Don’t trade your life for a mortgage
 First home is not dream home
 Always use a broker
 Look outside the top 4 banks
 Think 7% long term average
Types of Mortgages
 Principle and Interest - pays down the debt
 Interest only – debt remains the same
 Offset account – interest is offset
 Redraw – extra repayments available
 Fixed – in bank’s favour and penalties
 Honeymoon – don’t do it
 Variable
 Cheaper rate - longer term and less features
Mortgage Reduction
 Make it a priority
 Payments greater than the minimum, always
 Extra repayments at the beginning
 Salary credit into mortgage
 Extra payments (fortnightly)
 Annual lump sum payment (tax return)
Insurance
 79% Car insurance
 77% Home Contents and Building insurance
 69% Private Health insurance
 45% Income Protection
 22% Life Insurance
 Do you take out travel insurance?
 WHY?
ASIC, IFSA, DEXX&R, Rice Warner
Under Insured
 Only 30% of young families Life insurance needs
are covered by default within superannuation
 60% families could not cope more than 12
months should main breadwinning parent die
ASIC, IFSA, DEXX&R, Rice Warner
Ask yourself
 What would my life look like without my income
if I was sick or injured?
 Could my family survive on one income?
 Could I afford to pay the mortgage/rent/car
loan/medical expenses and put food on the
table?
 Could I keep the kids in school?
 Government $794.80(single) $599.10(couple) a
fortnight
Centrelink
What it can mean
 50% reduction in household income (or more)
 100% reduction for singles
 Can’t afford best medical care
 Taking kids out of school
 Selling family home
 Moving to a smaller rental
 Moving further out
 Can’t renovate to suit new situation
Protect Yourself and Your Family
 Life Insurance
 Death or Terminal
 Debt plus cost of running family without you
 Singles without dependants don’t need it
 Total and Permanent Disability – 3 months
 Musculoskeletal, neurological, mental health
 Debt, running family, and extra costs for you
Protect Yourself




Trauma
Cancer, cardiovascular, stroke
At least $100,000
Pays medical costs
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Income Protection
Musculoskeletal, mental health, cancer
75% of your income
10% into super
Tax Deductible
Insurance Terms
 Stepped premiums – increase with your age
 Level premiums – much cheaper over long term
 Indemnity – need to prove salary at claim
 Agreed – benefit agreed at application
 Waiting period – 30,60,90
 Benefit payment – 2 years, 5 years, to age 65
 TPD ANY harder to claim
 TPD OWN covers your last profession
 It’s complicated, see an adviser
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