Top 5 Things to Consider When Starting Out with Investing

NOW THAT YOU'RE EARNING SOME HARD EARNED CASH YOU HAVE COME TO THE POINT IN LIFE WHERE YOU KNOW YOU HAVE TO STOP PARTYING (OR AT LEAST SLOW DOWN A LITTLE!) AND START PLANNING FOR YOUR FUTURE.

With so many pathways to go down, deciding what to do next with your money is more stressful and confusing than you first thought. Investing, Budgeting, and Spending all becomes too blurry and often shelved because it’s all too hard.

But don’t fear! Help is out there. To get you started take a look at these:

TOP 5 THINGS TO CONSIDER WHEN STARTING OUT WITH INVESTING;

1. YOU HAVE MULTIPLE SUPERANNUATION ACCOUNTS AND DON’T KNOW WHAT TO DO WITH THEM

Very few young adults even contemplate the thought of superannuation. By looking at it now in your 20s, you can fully take advantage of the potential growth of the superannuation environment. Consider pulling all your super into one account and providing those details to any new employer to ensure it is going to one place and working hard for you from day one.

2. STRUGGLING TO UNDERSTAND PERSONAL FINANCE

A financial Google search is complicated and misleading and by no means ‘personal’. Get an expert on your side to educate you on what you need to know. 

3. BUDGETING NOT WORKING FOR YOU

Creating a realistic budget and sticking to it may seem impossible, you want to save for your future but you can’t resist the smashed avo! Budgeting doesn’t need to mean living on the poverty line in order to put money away, it can be more about making the right decisions. 

4. YOU HAVE BIG DREAMS BUT CAN’T SEE A WAY OF MAKING THEM HAPPEN

Dreams are meant to be big, you just need a carefully designed financial plan to fulfil them. Visualising your goals can be really powerful to ensure all your financial decisions reflect the right direction you want to progress towards achieving your goals rather then further away.

5. LEAVING YOUR SAVINGS IN THE BANK

While this may work for older clients, Millennials generally want to see their savings work a little harder to enable them to save for a big holiday or their first home. Getting into investment doesn’t have to cost the earth you can start with just a few thousand dollars. 

Please note these are just ideas and is not financial advice, please seek specific guidance from a licensed financial planner like our friends over at Astute Brisbane Central. If you want advice on investing in property, contact us via the form below.

Taking those initial steps to buying your first home can be exciting and daunting all at once. Here are some of the top things to consider before you purchase:

HOW MUCH DO YOU NEED FOR A DEPOSIT?

As a rough guide, aim to save 20% of the purchase price, plus enough to cover additional costs. If you borrow more than 80% of the purchase price, you may have to pay Lenders’ Mortgage Insurance (LMI). This is an insurance that protects the credit provider from the borrower(s) not being able to repay the loan.

But don’t be discouraged if you haven’t been able to save 20%, there are loans available for up to 90% and  95%, which could help you get into the market sooner!

HOW WILL YOU BALANCE WHAT YOU’RE ABLE TO BORROW WITH HOW MUCH YOU CAN REALISTICALLY REPAY?

It’s important from the start to only borrow what you need and can afford. Careful budgeting is needed in the first stages of applying for a loan so that a projection can be made to determine your spending requirements moving into the future. 

AM I ELIGIBLE FOR ANY GOVERNMENT GRANTS OR ASSISTANCE AS A FIRST HOME BUYER?

State and Federal government grants and incentives are changing all the time for First Home Buyers depending on buying new or established, and also depending on your budget. Check with the relevant government bodies as to what’s available for you situation. 

HOW DO INTEREST RATES WORK?

Depending if you apply for a fixed or variable rate on your home will depend what charge is imposed on you for borrowed money. 

A Variable Rate goes up and down, which is at the lender’s discretion, so there is never any certainty. However, you do have the ability to make extra repayments to pay it off quicker and flexibility to sell with no penalty. 

A Fixed Rate is a locked interest rate where you can keep it constant for a period up to 5 years. The benefits of this are you know exactly what you are going to be paying in that period. However, you don’t have the chance to benefit from falling interest rates and you may not be able to pay extra into your home loan.

CAN YOU USE THE BANK OF MUM AND DAD

For many first home buyers, mum and dad play a crucial role in gathering funds to contribute to their deposit. It’s important to differentiate between gifting money and being a guarantor.

Gifting – Parents are able to give any sum to their children to contribute to the loan. It must be a gift, not a loan with interest charged.

Guarantor – S parent becomes a guarantor to the loan and a co-borrower if their child defaults on the loan. The lender could ask them to stake over the repayments.

Please note these are just ideas and is not financial advice, please seek specific guidance from a licensed financial planner like our friends over at Astute Brisbane Central. Want more advice on investing in property in Brisbane? Contact us via the form below.