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Important Legal Information Nicole Heales is an Authorised Representative of Capstone Financial Planning Pty Ltd (Capstone). Capstone holds Australian Financial Services Licence (AFSL) No. 223135. Nicole Heales is a Credit Representative of Crown Lending Pty Ltd (Crown). Crown holds Australian Credit Licence (ACL) No. 388279. The advice provided in this presentation is general advice only. General advice is defined as advice that has been prepared without taking into account your objectives, financial situation and needs. Before acting on the advice, you will need to consider the appropriateness of the advice, having regard to your objectives, financial situation and needs. If the advice relates to the acquisition, or possible acquisition, of a particular financial product, you should obtain a Product Disclosure Statement (‘PDS’) relating to the product and consider the PDS before making any decision about whether to acquire the product. Whilst every care has been taken to ensure the accuracy of the material presented, Capstone, Crown and their authorised representatives will not accept any liability for any errors or omissions in the information provided.

Talking About Consumer debt Mortgages Insurance

Credit Card Debt 11% to 21% $32 billion owing $4,300 per card holder average $700 in interest per year Minimum repayments will take 31 years Cost $14,900 in interest $216 each month debt paid off in 2 years and save $9,700 in interest $50 week gets back 29 years plus $10,000

False Economy Money in savings account and debt Interest earned ALWAYS less than interest paid Pay tax on interest earned Keep 3 months living expenses Pay down your debt

Personal & Car Loans 8% to 15% Save first then buy! 24 to 36 months interest free deals – be careful Shortest loan possible Longer the term the more you pay Second hand car End of calendar year run out sales

Credit Card Reduction Don’t ignore it Stop using Debit cards Transfer credit card balances to lowest rate Pay highest interest rate loan first Payments greater than the minimum, always Snowball effect

Mortgages Don’t buy a house you can’t afford Don’t trade your life for a mortgage First home is not dream home Always use a broker Look outside the top 4 banks Think 7% long term average

Types of Mortgages Principle and Interest - pays down the debt Interest only – debt remains the same Offset account – interest is offset Redraw – extra repayments available Fixed – in bank’s favour and penalties Honeymoon – don’t do it Variable Cheaper rate - longer term and less features

Mortgage Reduction Make it a priority Payments greater than the minimum, always Extra repayments at the beginning Salary credit into mortgage Extra payments (fortnightly) Annual lump sum payment (tax return)

Insurance 79% Car insurance 77% Home Contents and Building insurance 69% Private Health insurance 45% Income Protection 22% Life Insurance Do you take out travel insurance? WHY? ASIC, IFSA, DEXX&R, Rice Warner

Under Insured Only 30% of young families Life insurance needs are covered by default within superannuation 60% families could not cope more than 12 months should main breadwinning parent die ASIC, IFSA, DEXX&R, Rice Warner

Ask yourself What would my life look like without my income if I was sick or injured? Could my family survive on one income? Could I afford to pay the mortgage/rent/car loan/medical expenses and put food on the table? Could I keep the kids in school? Government $794.80(single) $599.10(couple) a fortnight Centrelink

What it can mean 50% reduction in household income (or more) 100% reduction for singles Can’t afford best medical care Taking kids out of school Selling family home Moving to a smaller rental Moving further out Can’t renovate to suit new situation

Protect Yourself and Your Family Life Insurance Death or Terminal Debt plus cost of running family without you Singles without dependants don’t need it Total and Permanent Disability – 3 months Musculoskeletal, neurological, mental health Debt, running family, and extra costs for you

Protect Yourself Trauma Cancer, cardiovascular, stroke At least $100,000 Pays medical costs Income Protection Musculoskeletal, mental health, cancer 75% of your income 10% into super Tax Deductible

Insurance Terms Stepped premiums – increase with your age Level premiums – much cheaper over long term Indemnity – need to prove salary at claim Agreed – benefit agreed at application Waiting period – 30,60,90 Benefit payment – 2 years, 5 years, to age 65 TPD ANY harder to claim TPD OWN covers your last profession It’s complicated, see an adviser

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