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Investment principles

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					Investment principles
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Authorised Representative
RetireInvest Pty Limited Australian Financial Services Licence 238429
Disclaimer


    RetireInvest Pty Limited (ABN 23 001 774 125) holds Australian
    Financial Services Licence Number 238429 and is licensed to
    provide financial product advice and deal in financial products
    such as: deposit and payment products, derivatives, life products,
    managed investment schemes including investor directed portfolio
    services, securities, superannuation, Retirement Savings
    Accounts.

    The information presented in this seminar is of a general nature
    only and neither represents nor is intended to be specific advice
    on any particular matter. RetireInvest strongly suggests that no
    person should act specifically on the basis of the information
    contained herein but should obtain appropriate professional
    advice based on their own circumstances.



                                         1
Agenda



      Introducing RetireInvest
      Have a plan
      Stick to your strategy
      Investment strategies
      Start early
      Plan for the unexpected
      The value of professional advice




                                          2
RetireInvest: our credentials



      Experienced
        — Over 25 years experience
        — Over 80,000 clients
        — Over $10b under advice
      Professional personal advice
      Advice underpinned by quality research and technical teams
      Over 110 offices nationwide
      Global company




                                  Good advice today means good living tomorrow…
                                       3
                                                                                                        Years
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                                                                -1




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                                                          19          0
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                                                                                                                                                                                      Be prepared



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                                                                19
                                                                   82




Source: Australian Bureau of Statistics, 2008
                                                                19
                                                                   84
                                                                19
                                                                   86
                                                                                                                                              Life expectancy continues to increase




                                                Females
                                                                19




4
                                                                   88
                                                                19
                                                                   90




                                                Males
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                                                                   92
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                                                                   00
                                                          20          3
                                                             03
                                                                -2
                                                                   00
                                                                      5
Stick to your strategy


    Don’t get caught up in the hype
       450,000                      Sticking to your investment strategy over the long term
                                    All Ordinaries Acc Index – December ‘79 – December ‘08
       400,000

       350,000

       300,000

       250,000

       200,000

       150,000

       100,000

        50,000

              0
                  Dec-79

                           Dec-81

                                      Dec-83

                                               Dec-85

                                                        Dec-87

                                                                 Dec-89

                                                                          Dec-91

                                                                                   Dec-93

                                                                                                Dec-95

                                                                                                         Dec-97

                                                                                                                  Dec-99

                                                                                                                           Dec-01

                                                                                                                                    Dec-03

                                                                                                                                             Dec-05

                                                                                                                                                      Dec-07
   Source: Colonial First State.                                                            5
Stick to your strategy

    Trends change
    1987            - Australian shares
    1988-91         - Property
    1991            - Term deposits
    1995            - Asian Tigers
    1996-97         - International shares
    1997-00         - Technology shares
    2000-03         - Investment property
    2004-07         - Mining and oil shares
    2008            - Cash




                                         6
    Stick to your strategy

Calender year            Best asset class                Worst asset class

1992                     Australian Fixed Interest       Australian shares

1993                     Australian shares               Cash
1994                     Cash                            Australian shares
1995                     International shares            Cash
1996                     Australian shares               International shares
1997                     International shares            Cash
1998                     International shares            Cash

1999                     International shares            Listed Property

2000                     Listed Property                 International shares
2001                     Listed Property                 International shares

2002                     Listed Property                 International shares

2003                     Australian shares               International shares

2004                     Listed Property                 Cash
2005                     Australian shares               Cash
2006                     Listed Property                 Australian Fixed Interest
2007                     Australian Shares               Australian Property Securities
2008                     Australian Fixed Interest       Australian Property Securities


 Source: Colonial First State                        7
Risk



• What is risk?
• Perception of risk varies due to:
    — Cultural differences
    — Past experience
    — Personalities
    — Individual wealth position
    — Time
• Your attitude to risk will determine which strategy will suit your needs




                                      8
Diversify



     Diversification is the spreading of the assets in a portfolio
     among a number of different investments in order to
     reduce risk.




     Diversification allows you to minimise risk and
                 achieve your objectives



                                    9
Diversify




                                                             Aust equity



                                                                      LPT
   Return




                                             balanced

                                                                    International
   Mortgages
                    defensive
               Enh Cash         Aust bonds
            Cash




                                                   Risk
            Illustrative only, not to scale
                                                        10
Diversify




                                                                        Aust equity

                                                           High Yield
                                                                                 LPT
   Return




                                                balanced
                         Hybrids
            Div Credit
                                      Syndicated Loans                         International
   Mortgages
                     defensive     Div Bonds
               Enh Cash            Aust bonds
            Cash




                                                      Risk
             Illustrative only, not to scale
                                                           11
Diversify


   Invest in a diversified portfolio
   Growth of $100,000 (December 1984 – December 2008)

  $1,800,000                      Diversified asset allocation
  $1,600,000                      International shares 30%
  $1,400,000                      Australian shares 30%
                                                                                                                                            $1,103,440
                                  Property 10%
  $1,200,000
                                  Australian Fixed Interest 25%
  $1,000,000                      Cash 5%
   $800,000
   $600,000                                                                                                                                 $766,041
   $400,000
   $200,000
           $0
                Dec-84

                         Dec-86

                                    Dec-88

                                             Dec-90

                                                      Dec-92

                                                               Dec-94

                                                                        Dec-96

                                                                                      Dec-98

                                                                                               Dec-00

                                                                                                        Dec-02

                                                                                                                 Dec-04

                                                                                                                          Dec-06

                                                                                                                                   Dec-08
    Source: Bloomberg, December 2008
    Past performance is not a reliable indicator of future performance.
                                                                                 12
Invest for the long-term


                    The short-term can be volatile
                    100%
                    80%
                    60%
                    40%
  Returns (%p.a.)




                    20%
                     0%
                    -20%
                    -40%
                    -60%
                           Dec-86


                                    Dec-88


                                             Dec-90


                                                      Dec-92


                                                                   Dec-94


                                                                            Dec-96


                                                                                     Dec-98


                                                                                              Dec-00


                                                                                                       Dec-02


                                                                                                                Dec-04


                                                                                                                         Dec-06


                                                                                                                                  Dec-08
                                                               1 year Australian share returns
                    Source: Bloomberg, December 2008. S&P/ASX All Ordinaries Accumulation Index.

                                                                               13
Invest for the long-term


     Volatility is reduced over the long-term
                       100.0%
                       80.0%
                       60.0%
     Returns (%p.a.)




                       40.0%
                       20.0%
                        0.0%
                       -20.0%
                       -40.0%
                       -60.0%
                                Dec-94

                                         Dec-95

                                                  Dec-96

                                                           Dec-97

                                                                    Dec-98

                                                                             Dec-99

                                                                                      Dec-00

                                                                                                    Dec-01

                                                                                                             Dec-02

                                                                                                                      Dec-03

                                                                                                                               Dec-04

                                                                                                                                        Dec-05

                                                                                                                                                 Dec-06

                                                                                                                                                          Dec-07

                                                                                                                                                                   Dec-08
                                 3 year Australian share returns                                             10 year Australian share returns
    Source: Bloomberg, December 2008. S&P/ASX All Ordinaries Accumulation Index.

                                                                                               14
Invest for the long-term


             Sharemarket rises over time
Value of Investment
                                                $10,000 Invested from December 1984 to December 2008
       $AUD
     $250,000.00


     $230,000.00


     $210,000.00                                   S&P/ASX 300 Accumulation Index


     $190,000.00


     $170,000.00


     $150,000.00


     $130,000.00                                                                                                                                                                                                       $133,421
                                                                                                                                                                                                                       $133,421.46


     $110,000.00


      $90,000.00


      $70,000.00


      $50,000.00


      $30,000.00


      $10,000.00
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   Source: Bloomberg, December 2008. S&P/ASX All Ordinaries Accumulation Index.
   Past performance is not a reliable indicator of future performance. 15
Invest in growth assets



   Returns after tax and inflation

   Your income                Your income   Interest rate   Return after   Return after tax
   level ($p.a.)                tax rate        %p.a.        tax %p.a.      and inflation
                                                                               %p.a.
   Up to 6,000                    0             5.0             5.0             2.50
   6,001 - 34,000                 15            5.0            4.25             1.75
   34,001 - 80,000                30            5.0             3.5             1.00
   80,001 -180,000                40            5.0             3.0             0.50
   Over 180,000                   45            5.0            2.75             0.25
  Excludes medicare levy.
  Assumes inflation of 2.5%



                                                 16
Take advantage of super



    Access all types of investments
    Pay a low tax rate on
      — contributions
      — Returns

    Pay zero tax on income from age 60
    Achieve financial independence sooner
    Government ‘encouragement’




                                       17
Superannuation


   Invest $100,000 @ 8% pa and in 10 years

     $250,000



     $200,000     $193,069     $190,911

                                           $170,491
                                                       $155,594
                                                                  $149,741
     $150,000



     $100,000



      $50,000



          $0
                 Super (15%)    16.5%          31.5%    41.5%      46.5%
                                           Tax rates




   Medicare levy included
                                          18
Borrowing to invest



       Known as gearing
       Increase assets and increase debts
       ‘Good’ debt - tax deductible costs
       Assets increase faster than debts, you profit
       Debts increase faster than assets, you lose
       Return = income (rent/dividends) + growth
       Will magnify gains and losses




                                          19
Gearing vs not gearing



                                                                 Jules

                                                                   $110,000
                                                              $100,000




                                                                                   $60,000
                                                        $90,000




                                                                         $60,000
                                                               $60,000
                    James
                                    Up 10%
          Down 10%
                $36,000
                          $40,000
                                    $44,000




                                                                                   $50,000
                                                               $30,000
                                                                         $40,000
                                                   Down 25%                                  Up 25%

              No gearing                                        Gearing
                                              20
Gearing vs not gearing


                                                               Jules

                                                                   $110,000
                                                              $100,000




                                                                                   $50,000
                                                        $90,000




                                                                         $50,000
                James




                                                               $50,000
                                    Up 10%
          Down 10%
                $45,000
                          $50,000
                                    $55,000




                                                                                   $60,000
                                                               $40,000
                                                                         $50,000
                                                   Down 20%                                  Up 20%

              No gearing                                        Gearing
                                              21
Start early


     Investment growth and compounding
                                Katherine            Michelle           Elisa

      Age                           25                   35               45

      Investment               $100 per month        $200 for 10   $300 for 10 years
                                 for 10 years          years
      Total time invested         30 years            20 years         10 years

      Average Return                8%                  8%               8%

      Total contribution          $12,000             $24,000          $36,000

      Value of investment at      $85,272             $78,993          $54,884
      age 55

     Source: ING



                                                22
Start early


     Savings plans add value
     Month      Unit Price   No. of units   Rolling no. of   Total capital     Value of
                             purchased          units          invested      investment
     April       $1.50         66.67             66.67          $100          $100.00

     May         $1.60          62.5             129.17         $200          $206.67

     June        $1.30         76.92             206.09         $300          $267.92

     July        $1.10         90.91              297           $400          $326.70

     August      $1.40         71.43             368.43         $500          $515.80

     Sept.       $1.60          62.5             430.93         $600          $689.49


     Monthly investment of $100
     Average unit price paid was $1.42

                                            23
Planning for the unexpected


    Protecting your wealth is as important as creating your wealth
    Insurance puts a safety net in place through:
      — Income protection insurance
      — Trauma insurance
      — Life and TPD insurance




                                      24
Planning for the unexpected



   How much income protection insurance do I need?
    Normally cover up to 75% of salary (the maximum allowable)
    You can choose how long you get paid - from 2 years to life
       The shorter the period - the cheaper the premium
    You can choose the waiting period - from 14 days to 2 years - will depend
     on your accrued sick leave, annual leave and access to short term funds
       The longer the waiting period - the lower the premium




                                     25
Planning for the unexpected


   Trauma insurance
    Repay debts including the mortgage
    Bridge the gap left by income protection
      insurance

       What would you rather lose?
              Your house, or
             Your mortgage?




                                      26
Planning for the unexpected



   Protecting your loved ones with estate planning

   The right funds
   lifestyle maintenance, children’s education, debt cancellation

   In the right hands
   partner or spouse, children, grandchildren, charities, minimise tax

   At the right time
   immediate, medium and long term needs


                                              27
The value of professional advice



     Services on offer
      Retirement planning               Protecting you from the
      Superannuation advice              unexpected with insurance
      Wealth creation strategies        Savings plans
      Investment selection              Estate planning
      Tax effective investment          Redundancy advice
      Debt management and borrowing
       to invest




                                   28
The value of professional advice



     Living: Day-to-day, like keeping a roof over your head, a car on the
      road, food, bills, car, insurance, etc.

     Life Balance: The things you want to do, like a hobby, giving back to
      the community, future education, relationships, health or other past-time

     Lifestyle: Major lifestyle pursuits, such as overseas trips, home
      renovations, new car/boat.




                                        29
The value of professional advice

 The future is uncertain
                         Personal              Economic
   Social             circumstances             impacts
  security                                                    Taxation
  changes



          CASH                  INCOME                    GROWTH




    Government                                             Investment
     legislation               Interest rate                selection
                                 changes
                                      30
The value of professional advice


   How we work with you
   1. How we can help you?
   2. Getting all the facts
   3. Agreeing on the service
   4. Strategy development
   5. Presenting our recommendations
   6. Implementation and ongoing service




                                    31
Why choose RetireInvest



     Experience – over 25 years
     Accessibility – over 110 offices
     Professional reputation
     Skilled advisers
     Wide range of services
     Quality standards, policy & procedures
     Research expertise
     Strength and security
     Ongoing professional advice and personal service




                                         32
Investment tips


       There are no risk free investments!!
       Identify and understand various risks
       Diversify adequately
       Build a portfolio of quality assets
       Avoid selling during the hype
       Monitor debts
       Speak to your adviser if your circumstances change




                                        33
Start building your wealth


   Ask yourself:
    What are your lifestyle goals?
    What lifestyle do you want in the future?
    How much money do you need to support your lifestyle?
    How much are you currently saving towards your goals?
    How much more (or less) do you need to be saving each year to achieve
     your goals?
    Are there better ways of achieving your goals?
                  Find a balance between today’s lifestyle
                      and security for the future….



                                     34
Start building your wealth




      “Risk comes from not knowing what you’re doing.”
                                              Warren Buffet




                             35
Thank you for attending

Add office contact details

RetireInvest Pty Limited Australian Financial Services Licence 238429

				
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