Author: Xavier Quenon

One of the greatest sources of pride for a parent is to teach their children a lifelong skill.

And seeing that parents spend so much time, money and energy protecting their children, educating them, ferrying them to sport or dance classes, there is one blindingly obvious thing I have often pondered.

Why do parents spend so little time teaching their kids money and investment skills?

Perhaps, and maybe this is also obvious, the parents doubt their own abilities in these matters. In many families, I know, there is an inherited problem in that money issues are barely discussed – not the income of the household, the expenses or the net worth.

Granted, idle playground gossip is a risk you run by letting the kids in on too much information (a little like employees, where the boss’s tactic is never to let the staff compare salaries).

But surely if you want to protect your children, and their assets, then the sooner you teach them the merits of compound returns, the advantages and dangers of debt and the need for investments with cash flow the better off you and they will be.

Just one small example. Start saving away around $50 a week for a kid at the age of 15 ($2500 a year). Once they start to earn, say at 20, encourage them to lift it to $100 a week ($5000 a year). When they turn 30, $200 a week ($10,000 a year). It’s not a massive ask.

Let’s assume the interest rate (or dividend rate, even better) is a constant 4% – which you will now get from many cheap index funds or exchange-traded funds – then at age 65 the person will have $1.17 million.

Here I am being very conservative, only accounting for the income – not the increase in the capital value. If I assume an average 4% capital growth as well (still conservative) that figure would jump to $2.83 million.

Just one small question … if you waved that sort of maths under the nose of even a non-numerate teenager, do you imagine they might listen – even if for a few moments?

Now take a person whose parents decided not to encourage them to save, and who only came upon the idea themselves later in life when their income picked up. Here I’m assuming they start saving around $200 a week from the age of 30. Using the 4% return, they end up with around $776,000 – or about $394,000 less than the person whose savings started earlier.

If I add 4% capital growth to that equation, the 30-year-old ends up with $1.87 million. It’s certainly still worth having but the compounding effect has not had as long to work. It’s close on $1 million short of the family and the kids who started salting away the money much earlier.

The other education I think parents and kids should engage in is to invest through their kids’ eyes. A younger person might have spotted Facebook as an investment before you.

Or Nintendo (Pokemon Go) or any one of the young fashionable labels that emerge from the pack while you are still listening to music from 20 years ago. Again, it might pique their interest that there’s money to be made by spotting trends early.

The truth is that all investment needs vision and imagination, along with the fundamentals of cash flow, yield and gearing. And understand that the motives for teaching these concepts to your children are not completely altruistic. The sooner a child can financially stand on their own two feet, the less likely it is that they will come and tap the bank of mum and dad, like so many are doing today.

Good for you … good for them

One in five Australian renovators set aside no money at all as a contingency… Zero, Zip, Zilch, Nada!

An accurate and extensive budget, with at least 5% contingency, will give your renovation the best chance of success

Yet not enough people set aside money in case of disaster, and this can really affect how stressful the renovation process is.

You don’t need to find your new home before you can apply for a loan.

In fact, there are good reasons to speak with your Go Mortgage Broker to get your loan sorted beforehand…

Some lenders provide a loan pre-approval which is usually subject to meeting required terms and conditions.

This is where your loan limit is approved for a certain time (usually around three to six months), and providing your circumstances have not changed you’ll know exactly how much you can afford to pay for a property, and you’ll have the freedom to make an offer on a property knowing that your finance is already organised.

You’ll have a better idea of what properties to look for, because you won’t waste time looking for something outside your price range, and once you find the right property, you’ll be able to focus on the purchase rather than having to sort out the finance at the same time.

With a pre-approved loan, there are fewer chances of hiccups with the sale process, and in some cases, vendors (sellers) will accept an offer below list price and take the property off the market with confidence knowing the buyer is serious.

If you decide to make an offer you’ll be in a position to move quickly if your finance is sorted – this will help you be at the top of the real estate agent’s list when sleceting a buyer, and you can even attempt to bid at auction.

There are hundreds of different loans out there in the mortgage marketplace – However, fundamentally, they are all based on two key things:

• Principal – the amount of money you borrow
• Interest – how much you pay to borrow the money. It’s calculated on the outstanding principal

From here, there is a wide variety of loan features and structures to choose from, and it’s worth knowing what’s involved with each to make an informed decision.

If you want someone to do the legwork for you and find a home loan that is perfect for you, speak to your Go Mortgage broker.

Are you thinking about buying property? If the answer is yes, congratulations!

Buying property – be it something you plan to live in or something you plan to rent out – is a truly rewarding experience.

If you are on the property purchasing path, it pays to think about your options. The mortgage market is becoming increasingly complex, with different lenders frequently tweaking their policy and pricing in line with their appetite for business.

Given this, one of the best things you can do when buying property is work with an expert – But which one?

Upgrading your home doesn’t always mean investing in costly renovations.

There are plenty of ways for you to give your propertya great facelift on a budget.

Here are 4 ways to get max BANG for your bucks:

1. DIY paint job
Giving your home a new lick of paint is one of the cheapest upgrades you can make. It costs an average of $10–$30 per square metre (including the ceiling) to have interiors professionally painted in Australia, so you can save plenty by doing the work yourself. It’s also a chance to get the whole family involved in a fun project.

Fresh paint will not only make your house sparkle, but it could potentially fetch you a higher price when it comes time to sell.

If, because of budget or time constraints, you don’t want to paint the entire interior or exterior of your house, consider what will make the biggest impact, like painting the woodwork, skirting boards or maybe a single room. When it comes to certain paint jobs, less is sometimes more. If you are painting to sell, pick warmer neutral colours, like off white.

2. New flooring
Upgrading your flooring is a sure-fire way to give your home a new look. Hardwood remains a popular and reliable choice for many, but other options include polished concrete, cork, vinyl or, for the environmentally conscious, bamboo.

Existing hardwood floors can be re-sanded, a process that opens up the possibility for staining, painting or resealing.

If your home has carpet, a professional clean can make a vast difference, as can getting rid of the carpet altogether – especially if it’s dirty, old or frayed.

3. Replace small fittings
Another easy way to spruce up your home without spending too much is to update tired-looking bathroom and kitchen fittings. Think faucets, showerheads and oven tops, as well as other fixtures like doorknobs, lighting and banisters.

4. Redistribute light
Your home can be illuminated, quite literally, by allowing light to reach small or enclosed spaces, such as windowless bathrooms, corridors and those awkward sections of living rooms where natural light doesn’t hit.

You can achieve better light distribution by installing a solar tube or tubular skylight. Design standards for these products have improved significantly in recent years, with options available for big and small budgets. Installations can even go as low as $100 if you prefer the DIY option.

These are just a few of the cost effective ways you can update your home with small jobs that make a big difference.

If you need help with funding your renovations, Go Mortgage can help you figure out how to make it happen.

Renovating a home is exciting but it can also feel a bit daunting.

After all, you want to create your dream home without breaking the bank.

That’s why it’s important to have a realistic idea of what things will cost before you start swinging the hammer.

Here are 5 steps to help you work out your budget: Step 1: Decide on the scopeRenovations can be large or small, expensive or cheap. The first step when setting your budget is deciding exactly what you want to achieve. Start with a list of the must-haves, as well as what would be nice to have if your budget allowed for it.If you’re renovating on a tight budget, focus on renovating the areas that will add the most value. Upgrading an outdated kitchen, for example, is likely to increase the value of your property pretty significantly. There are also plenty of DIY jobs you can do to give your home a great makeover on a budget, find out here.Step 2: Do your research and use every tool at your disposalThere’s no need to reinvent the wheel when putting together a renovation budget. Tap into your personal network and find out about their experiences with home improvements – you might be surprised by their useful recommendations.When it comes to online tools, Renovate Forum is Australia’s largest online renovation community where you can share advice and read up on experts’ opinions. Renovation calculators can also help you work out costs based on where you live, what you want to do and the quality of finishing you hope to achieve.Step 3: Get across all the costs involvedApart from the standard cost of contractors and materials, there are some other fees you should be aware of. If your renovation requires council approval, for example, you might need to fork out for certification fees.For larger renovation jobs, it’s pretty likely you will need to factor in some specialist costs, particularly if you have to excavate, demolish or level the land before building can start. If the job will take a significant amount of time, temporary fencing and portable toilets might need to be added to your expenses. Depending on your priorities and the complexity of the renovation, you can also encounter unexpected costs when rewiring electricals and insulating your new structure.Step 4: Shop around for quotesOnce you settle on how much you can afford, it’s time to get an official quote. It’s always a good idea to shop around and collect detailed cost estimates from different contractors – that way you can compare quotes and negotiate the best possible price.It’s also important to read the fine print on every contract before signing, or get some legal advice if necessary. The Fair Trading Government Agency in your state may be able to offer advice to make sure you are only dealing with a licenced tradesman.Step 5: Have a contingency planOnce you’re happy with a quote, it’s a good idea to add at least five per cent to the total estimate. With a bit of wiggle room, you’re covered for any unforeseen expenses that may crop up during or after the renovation.You can also discuss the option of being billed in stages as the work progresses, rather than a lump sum upon completion. If your contractor agrees, consider setting an expenditure cap for each stage of the renovation and discuss any budget deviations as you go.If you need help getting some funds for your renovation projects, Go Mortgage can help assess your equity levels, budget and whether a top-up or a refinance can enable you to get the job done

Research from Roy Morgan shows an ongoing rise in renovation activity in our country¹.

Specifically, in the last 4 years close to 8.4 million out of 13.6 million homeowners in the country did renovation work on their property.

That’s a whopping 61% of us whipping out the hammers and splashing out on new paint.

Find out why Aussies are renovating not relocating:

According to a survey from Houzz and Home Australia², it’s about four key things:

• Staying in a place we love
• What we can actually afford
• Getting the best return on our investment, or
• Creating our perfect fit.

As you’d expect, there’s a bit of a difference across age groups. ‘What we can afford’ is a big category for the 25 – 34 group, which makes sense. It’s a time of life when many of us are getting our careers going and having young kids at the same time – not cheap to do. ‘Perfect fit’ probably tends to come a bit later when the youngest has stopped spreading food and drinks around the place. Where do we focus our efforts?Craig James, the chief economist at CommSec noted that: “… data shows that renovation loans hit seven-year highs”… suggesting that more people have decided to stay put and add extra rooms or revamp kitchens and bathrooms³. Yes Craig, they have but it seems they’re busy in the living room as well. It’s true, the kitchen is still the big favourite – with people choosing to lose outdated looks and putting in new benchtops to make it feel fresh. But in the Houzz study, the living room takes a surprising equal second place. Multiple studies tell us that the bathroom renovation adds more value overall4, so it seems we’re renovating with our hearts for ‘perfect fit’ more than we are with our ‘future value’ heads. Perhaps we Aussies are home-loving nesters at heart, and that’s what really drives us. Renovation may be our new way of having our perfect ‘new’ home. Of course we still want a quality outcome, which is why most of us use a professional to get the job done – and that means having a good plan and doing a budget.If you’re thinking about renovating and wondering what to budget for it, check out our handy article on how to work out your renovation budget. Alternatively, there are plenty of ways for you to give your home a great makeover on a budget, learn about it here.Getting started on your dream home renovation has never been easier. Talk to a Go Mortgage Specialist on 1300 855 244 about your home loan options and find out how you can refinance your existing home loan and get funding for your current projects.Sources:¹ http://www.roymorgan.com/findings/7102-renovation-nation-home-improvement-in-australia-201701090848
² https://www.completehome.com.au/renovations/expert-advice-10-ways-to-add-value-to-your-property.html

Things have changed significantly over the last few decades…

Cars are expensive items and many people may choose to apply for a car loan instead of buying with cash or from the equity in their home. These tips can assist with the application process, and help you find the right loan for your circumstances.