Growing your Nest Egg
Whether you're planning for a child's education or thinking of going back to school as an adult, college or grad school can be an expensive proposition. Fortunately, plenty of tools exist to help you. Here are a few tips to consider.
Start saving now
Maybe you didn't follow the ideal scenario: stockpiling money for college from the moment of your child's birth. Maybe you're ready to return to school yourself, but haven't saved for it. That's understandable-but the sooner you get started, the better. Not only will you have more time to put aside funds, but you could also benefit from:
Compounding. Even if you start with just a small amount, over time compounding could make it snowball into much more.
More aggressive investments. Depending on your situation, you may be able to put money into more aggressive investments (those with higher risk, but higher potential returns) early on, and then move to more conservative investments, as you get closer to needing the funds.
We can help you figure out how much money you may need to put aside.
Learn the tools
There are many different ways to help children and adults save for private or tertiary education.
Your name or theirs?
If you're planning for a child's education, you'll need to decide whether to save and invest in the child's name or your own. Ask yourself:
Do you hope the child will get financial aid?
How sure are you that the child will attend college?
Are taxes a consideration?
Saving in a child's name can reduce the amount of financial aid the child can receive-so if you're hoping to fund part of the tuition with financial aid, you may want to save in your own name. Plus, funds in some accounts become the child's property as soon as he or she reaches legal age-whether or not the child attends private school or university.
Don't dip into your retirement savings
No matter how tempting it may be, you should probably not raid your superannuation account-or stop investing regularly for your retirement-to fund tuition. After all, you or your child may be able to borrow money for tuition-but you probably won't be able to borrow money to retire.
If you're funding a child's education, don't rely on the child to take care of you financially in your old age, either-your child may have financial or health issues of their own at that time.
Investigate government financial support
Financial aid may be an option for you. You might want to:
Get the facts.
Investigate financial support through Centrelink for things such as Austudy. Ask about your current financial support eligibility and how it might change with your financial circumstances. Understanding what support is available well before costs commence for secondary or tertiary education may be extremely useful in considering how you structure your financial affairs
Research scholarships and grants
Private School administrators can provide details of how to apply for these types of financial support. Some research into this well in advance will put you in an informed position.
Ask for help
Finding a smart, systematic way to fund for education can be confusing-even more so because no single plan is right for every person. The best way for you to save and invest depends on your income, tax bracket, the student's age and other personal factors. Seek advice from a financial planner that relates to your specific financial circumstance.
Whether you're new to the savings game, are looking to expand a small fortune or somewhere in between, nurturing your nest egg can be tricky yet rewarding. Learn how to get-and stay-on the right track.
Lay a solid foundation
Before you focus too heavily on growing your money, make sure you're on solid financial ground.
Banish high-interest debt. Some debt-such as a mortgage or car loan-is manageable for most people. But think about paying down high-interest debt, such as credit card debt, before you throw your financial resources into growing your nest egg.
Why? Chances are the interest rate on this debt is higher than the rate of return you can expect from investing. If you invest before you pay down the debt, you may ultimately come out behind.Establish an emergency fund.
If your situation is typical, you probably want a reserve fund that could pay all your expenses for three or more months should you temporarily be without income.
Your emergency fund doesn't have to be in cash-you may have it in low-risk, liquid investments, such as an online savings account or cash management trust.
Get insured-and stay that way.
A serious accident, lengthy illness or major home repair could be disastrous to your financial health if you aren't prepared. Make sure your family always has appropriate health, car, life and homeowner's insurance.
Get set to invest
One of the best ways to grow a nest egg can be a regular investing plan. Investing (versus simply saving) can provide potential returns that help your money outpace inflation. Investing can also help you benefit from compounding.
Think about putting aside a set amount of money each month for a regular investing plan. You may decide to set aside a specific dollar amount or a certain percentage of your salary each month.
Investing the same dollar amount at a regular interval, such as investing $200 once a month, is called dollar cost averaging. This gives you the opportunity to invest regardless of where investment markets are at the time - you average into the market on a regular basis. A clear budget should help establish what surplus income you have to allocate to regular investment.
Rapid growth or slow and steady?
What kinds of investments should you choose? Some people aim to rapidly grow their money, and are willing to take a considerable amount of risk for that chance. Others prefer a slow, low-risk approach.
To figure out what approach is right for you, consider:
Your tolerance for risk. All investments carry some risk, but investments with the potential for the biggest returns (the potential to make the most money) tend to come with the highest risk of losses, too.
Our Risk Profiling Questionnaire can help you figure out your investor risk profile and how much risk you are comfortable with.Your investment goals and timeline. What are you hoping to do with your nest egg? If you're investing for distant goals-such as a far-off retirement or private school education-you may want to be more aggressive and pick higher-risk investments, as you'll have time to recover from any temporary setbacks or dips in the market.
If you have more immediate needs for your nest egg, you probably want to stick to more conservative, lower-risk investments.
And if you have a variety of different goals-regular travel, buying a bigger house, taking classes, retiring one day-your strategy may involve a variety of investments with different levels of risk.
Find the right way to allocate your assets
Asset allocation is a very important component in an investment portfolio. Rather than placing all your money in one type of investment, you allocate a certain percentage to each of the major asset classes - shares, property, fixed interest and cash. This can be achieved either through direct investment such as a property or shares, managed funds or a combination of both.
The right asset allocation for you depends on personal factors-such as your goals, your comfort with risk and how much money you have to invest.
We are able to assist you in finding the right balance.
Getting a boost
A lump sum-from an inheritance, for example-can give your nest egg a real boost. But be careful how you invest it. Even if you start your nest egg with a lump sum, still consider investing a set amount on a regular basis. Even if it's only a small amount, invested wisely and regularly, it can make a big difference in growing your nest egg.
Get started
If you're a novice to investing, there is lots of information where you can learn the basics.
And whether you're a novice investor or advanced, a financial planner can help to identify issues and come up with ideas you may not have considered.
To plan a course of action which will ultimately lead to a better life style in my retirement
To work on my business strategy, manage my business for greater profitability and help with my ongoing taxation compliance obligations
When I need help to negotiate the maze of options available to me and to make sure I am fully informed before making any decisions.
 | Financial Planner Dip FP, CFP Licensed Dealer in Securities & Registered Life Insurance Broker. Winner of the prestigious National "Securitor Adviser of the Year" Award for 2008. |
 | Financial Planner Dip FP, CFP, Grad Dip Mgt Licensed Dealer in Securities & Registered Life Insurance Broker. |
 | Accountant BA(ACC) CA FTIA AICD Member of the Institute of Chartered Accountants and Justice of the Peace for SA |
 | Financial Planner Dip FP Licensed Dealer in Securities & Registered Life Insurance Broker. Winner of the prestigious 2009 Securitor "Rising Star of the Year Award" |
 | Mortgage Specialist Cert IV Mortgage & Finance Services, AMC. Winner of the prestigious SA/NT Rookie of the Year Award 2008/09 |