SMSF Expo

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PE Capital were delighted to participate in the inaugural Melbourne SMSF Expo last weekend at the Melbourne Exhibition Centre. This event involved 70 exhibitors and a number of high profile speakers. It was the first event run in Australia by the SMSF Association which focused specifically on SMSF trustees and their needs.

 

It was a fantastic opportunity for PE Capital to talk directly with investors, to be able to launch a number of additional features to our Commercial Property Income Fund (CPIF) and Monthly Yield Fund (MYF)and to educate and build awareness around our brand.

 

It was also great to understand what SMSF trustees were concerned about, for example falling income streams, a lack of diversification in their portfolios and investment security. All of which are consistent with current SMSF literature.

 

Overall, it was a great event and we were pleased to be inundated with attendees seeking our type of investment solutions which offer competitive returns, regular income, access to commercial property alternative assets and a well-structure, diversified investment.  

  

Going forward, we look forward to working with the SMSF Association in developing this Trustee event further and would like to thank all those that made the Expo possible. For those that couldn’t make it, we would be happy to take you through how our investment funds may be able to assist you.

 

We look forward to hearing from you.

 

All the best

 

The PE Capital Team

 

For more information, please contact Jason Huang on 0430 107 109 or jh@pecapital.com.au

RBA may not raise rates until 2019

An interesting article by Shane Oliver (Chief Economist at AMP) discussing the expectations of no change to Australia’s official RBA cash rate until 2019. What is interesting is that the RBA has changed its view on the Australian economy (around economic growth rates and a potential property bubble) and that we mirror the US Federal Reserve with rate rises (Fed Reserve raised rates 3 times in 2017 and is expected to raise rates a further 4 to 5 times in 2018) compared to no change in Australia over that same period.

CONGRATULATIONS TRAVIS MAHONEY

The team at PE Capital is pleased to congratulate Travis Mahoney, our sponsored athlete, on his place in this years Commonwealth Games swim team.

 

Travis shares "I’m beyond happy to have qualified for my second and more importantly a home Commonwealth games. Not long to go now, super excited to race in front of a home crowd."

 

We will be eagerly following your progress Travis and we're backing you 100%

The PE Capital team and community would like to wish Travis Mahoney - Rio Olympian - all the best for the Australian Swimming Trials commencing today and running through to Saturday.

 

The Hancock Prospecting Australian Swimming Trial is just five weeks before the Commonwealth Games and in the same pool so we’re hoping all the hard work Travis has been putting in pays off.

 

Travis will be competing in the 200 and 400 metre medley events so good luck from the team at PE Capital.

The holy grail for your SMSF – diversification AND attractive income

Did you know the average SMSF investor has around two-thirds of their capital in shares and cash?* When you are relying on the income from dividends to fund your lifestyle it can be tempting to put all your eggs in one basket, despite share market volatility being a key cause of concern for SMSF investors.

However, diversification does not need to come at the expense of attractive income. The solution may be an investment opportunity you walk past every day.

Over the last 30 years, commercial property investments like shopping malls, office towers and industrial estates have consistently delivered healthy distributions, even in a low interest rate environment. Depending on your situation, they could also help you create a more diversified and reliable income stream — especially if much of your wealth is already tied up in shares, cash and residential property.


The high-yielding property alternative

While Australian residential housing has a history of exceptional capital gains, its income potential is more limited, particularly when prices are elevated. Sydney house prices are up nearly 75% and Melbourne house prices are up nearly 50% in the last 5 years. That’s why institutional investors and wealthy individuals have historically turned to commercial property as a rewarding alternative.
 

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Create a more diversified income stream

Commercial property also has the potential to reduce overall portfolio risk due to its traditionally low correlation to asset classes like Australian shares — meaning they’re less likely to underperform at the same time. This is because with commercial property, tenants are typically locked into leases for 3 to 10 years and are obliged to pay a steady rent even if their profitability has declined.

Three ways commercial property could help you diversify

  • Stable distributions. Earn income from long-term leases with well-resourced corporate and government tenants and built-in annual rent increases.
  • A hedge against inflation. Historically, commercial property values have tended to rise at rates similar to inflation, helping to preserve the real value of your capital.
  • Potential gains when rates are low. Commercial property asset values generally rise when interest rates are low and investors are willing to pay more for yield, helping to offset lower returns on your cash investments.

Is cash no longer king?

An interesting article by the Financial Observer commenting on why investors should be looking for alternatives to term deposits. One such alternative is exchange traded bonds (XTB’s) which, has a slightly higher risk profile but pays a substantially larger coupon and has greater liquidity. The team at PE Capital agree with this and as a result have invested approximately 40% of the Y Fund directly into an XTB separately managed account.

Why SMSF retirees will need an extra $120k to retire

A great article looking at why SMSF retirees will require additional funds to maintain a comfortable lifestyle once they retire. The reason being, that conservative investment portfolios and the associated low returns (especially cash and fixed income) will need to be offset by an increase in funds to meet their lifestyle requirements. The other alternative is that they place their funds in investments that pay a better return

Morgans Financial Advisor Briefing

Sam Osborne, Director of Capital at PE Capital, recently presented the newly launched PE Capital Y Fund to the Morgan’s Financial adviser network. The Y Fund is an enhanced cash fund offering competitive returns with high levels of security and liquidity. It is aimed at SMSF trustees, institutions and retail investors who are seeking a better return than that available from term deposits. Morgan’s Financial is Australia’s largest retail stockbroking and wealth management firm, with over 300,000 clients, 500 authorised representatives and more than 50 offices around Australia

Creating Wealth 101

Becoming wealthy

 

What is the secret to becoming wealthy? What does “becoming wealthy” even mean? It obviously means different things to different people but, to me, it’s just a polite way of saying “getting rich”. So what does “get rich” mean? Again, it’s up to the individual but to me, a general, back of the envelope measure would be to have assets, less debt, of between $1m to $5m. This includes property, shares, super and cash.

 

Sound fair?

 

So what’s the secret to accumulating between $1m and $5m in net assets? There are a number of ways of getting there. This is my simple summary.

 

1.      Gift or inheritance. Someone you know gives you lots of money. Hooray!

2.      Win the lotto. Again, hooray!

3.      Invent something valuable. Think Steve Jobs, Bill Gates, Mark Zuckerberg, etc

4.      Have some special skill. Think Sports Star, Movie Star or Musician.

5.      Start your own business. That could be anything but importantly it needs to be something that someone else finds monetarily valuable. The other critical thing about starting a business is you need capital (cash) to start. Without capital it is very, very difficult to start your own business.

6.      The final way is, in my experience, by far the most common. It’s the way most “wealthy” people do it. It’s not glamorous, it’s not sexy and you won’t have much to post on social media. And, did I mention, it takes a long time, think 20 years. The good news is it’s available to almost everyone. You don’t need any special skills. You don’t need any capital to start. You don’t need much luck, although a little bit always helps. You will need to be prepared to work hard for a long period of time. And you will need to have ambition. Almost everyone you know who’s “wealthy” has done it this way. And, by the way, you already know how to do it, because this is what your parents have told you, endlessly.

 

Here’s how:

 

1.      Work hard at school. Get good marks.

2.      Go to uni. Preferably choose a course which offers high paying career opportunities. Think banking, accounting, law, medicine, IT, etc. Work hard. Finish your degree.

3.      Get an entry level job in said industry.

4.      Work hard. Get promoted. Stick at it.

5.      Buy a property to live in.

6.      Contribute to super.

7.      Buy an investment property.

8.      Invest in shares and managed funds.

9.   Keep contributing to super.

10.  Save your money.

11.  Do not lease your car. Buy it.

12.  Catch public transport to work.

13.  Eat at home.