Investments - Young Families

Are you thinking about buying a new or bigger family home?

As your family grows you feel it's time to settle down, you may be thinking about buying a new, bigger home.

Buying a family home is a big decision so it makes sense to get some help along the way. There are lots of questions to answer - where to buy, what sort of property, when is the best time?

It's also important to have a clear picture of your financial situation before you start as this way you can set clear goals around the amount you can afford to pay for your property and the level of debt you want to take on

Before you start to look for the best home loan and interest rates, there are some key questions you should consider

What size mortgage can you afford?
Do you have enough deposit?
Will your income be enough to cover mortgage repayments and allow you to live the lifestyle you want to?
What would happen if you couldn't work for a period of time?
How often should you pay your mortgage payments - weekly, fortnightly or monthly?

Want to understand your mortgage options better?

Have you thought about where you would like to send your kids to school?

Every parent wants their child to have the best start in life. So it's likely you've already started thinking about schools and possible even college or university

If you decide on private school the annual fees can be expensive - not to mention the added cost of school books, excursions and uniforms. Even if the thought is a few years away, you may also want to start thinking about helping your children with university or college fees.

By investing money now, you can make sure you'll have enough to pay fees in the future and some investment strategies may even give you tax beneifts along the way.

The first step is to understand how much money you'll need to cover the fees and it's important to remember that school fees generally go up each year

A regular savings or investment plan will help build up your savings over time so that you have the money available when it's time for your kids to start school

Are you starting to think about tax effective invesments?

At this stage of your life saving money is no doubt top of mind. As your kids start school or you move to a bigger house, it's likely your expenses will increase.

If you're looking for ways to build your wealth, managing your tax effectively can be one way you can give your savings an added boost.

There are a range of strategies you ca use to help manage your tax more effectively both inside and outside of super.

To grow your wealth over the longer term, it's worth thinking about investing in growth assets, like shares and there are tax effective ways of doing it.

Also borrowing to invest enables you to invest more money than you could on your own and with more money to invest you have the potential for greater returns. A margin loan is a tax effective way to invest because the interest you pay on your loan is generally tax deductible. You don't need to borrow large sums of money, you can start small and invest regularly to build up your investment portfolio over time.

It is important to remember that borrowing to invest can increase losses as well as your gains so getting quality advice is a must

Is your portfolio diversified?

When you first start building an investment portfolio it can be difficult to diversify across different asset classes because you may only have one or two investments in your portfolio but as your portfolio grows, diversification becomes easier and also more important.

The key to achieving long term growth in your investment portfolio and reducing your overall risk is to diversify.

By diversifying the investments in your portfolio, you're effectively spreading your risk. You give yourself the opportunity to benefit from a range of investments that may perform differently in different market cycles.

You can diversify your portfolio at many levels across asset classes, sectors and investment manager. Diversifying across asset classes can be particularly effective especially when sharemarkets are volatile

Diversifying also means you don't have to try and guess what the best performing asset class is going to be. If you "chase" returns each year and invest in the best performing asset class from the previous year, you may end up worse off than if you stayed invested in a balanced portfolio.

There are a number of investment solutions to help you achieve your goals, including:

multi-manager funds
single manager funds
separately managed accounts (SMAs)
direct shares
other listed investments - listed companies (LICs), exchange traded funds (ETFs) and instalment warrants

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