COLUMN

by

Noel Whittaker

Monday, 19 December 2011

It has certainly been a challenging year, with the Australian Stock Market down 13% and the property market in most areas in the doldrums.

Naturally investors are wondering what 2012 will hold but unfortunately, as I don't have a crystal ball, I am unable to provide an accurate answer.

However, I do know that if you take care of the elements in your life that you can control, you will almost certainly be able to cope with the unexpected challenges that come up.

The problem for many is spending more than they earn.  This puts them on a downward spiral as they have to resort to credit cards to get by, and are then faced with finding extra money to pay interest on those debts.  A household that is struggling to get by without credit card debts will find it much harder to cope when their finances are further diminished by the monthly credit card bill.

Therefore put budgeting at the top of your to do list for next year.

Also take advice about using strategies to improve your situation.

These may include paying your life insurance through your superannuation fund so the premiums are made from pre-tax dollars, and starting a transition to retirement pension if you are 55 or over.

You should also move to paying your mortgage fortnightly instead of monthly because this will result in repaying the equivalent of an extra month's payments every year without noticing it.  This will cut the term of the loan and provide a safety buffer if rates rise.

In the New Year we will discuss many other strategies that will enable you to build wealth in a tax effective way.  In the meantime have a wonderful Christmas.

Noel Whittaker is a co-founder of Whittaker Macnaught Pty Ltd.  His advice is general in nature and readers should seek their own professional advice before making any financial decisions.  His email is noelwhit@gmail.com

Regards

Noel Whittaker  AM

Co-Founder

Whittaker Macnaught

Level 10, 40 Creek Street, Brisbane QLD 4001 Phone 1800 967 777 | Fax 617 3229 5333

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