Cognitive Bias – Thirties and forties
16/05/2024
Market Update – May 2024
27/05/2024
Private school and university fees can cost tens of thousands of dollars annually, and fees often rise faster than inflation. That’s why it’s common for parents to be concerned about the best way to fund their children’s education.
One potential solution is to invest in an investment or education bond. The bond is tax-aware, and investments within the bond are tax-paid, meaning taxed within the bond and you don’t include them in your individual tax return. You pay into the bond with a one-off lump-sum contribution or regular monthly contributions and then make withdrawals in the future to cover your children’s school or university costs.
However, bonds, like any financial solution, have downsides. Like other listed and unlisted investments, bond performance will depend on market conditions. Also, you generally must remain invested for at least 10 years for the best possible tax outcome.
There are a couple of other points worth considering. An investment or education bond is a ‘forced savings device’, which might be what you need to practise good money habits. On the other hand, if you had the mindset to proactively invest the same amount of money in a non-bond structure, you might achieve significantly higher returns.
There’s no right or wrong here – only what’s right for you. Evaluating the pros and cons of each is the first step.
Sound overwhelming? Let’s discuss it.
This is general advice only. Please speak to a licensed professional for personal advice related to your specific situation. If you want expert advice on achieving your goals, speak to Affinity Private Advisors today by calling 1300 769 304, emailing enquiries@affinityprivate.com.au or filling in this online form.
The information contained in this article is current as at 23/04/2024. Any advice or information contained in this report is limited to General Advice for Wholesale clients only.
The information, opinions, estimates and forecasts contained are current at the time of this document and are subject to change without prior notification. This information is not considered a recommendation to purchase, sell or hold any financial product. The information in this document does not take account of your objectives, financial situation or needs. Before acting on this information recipients should consider whether it is appropriate to their situation. We recommend obtaining personal financial, legal and taxation advice before making any financial investment decision. To the extent permitted by law, Affinity Private Advisors does not accept responsibility for errors or misstatements of any nature, irrespective of how these may arise, nor will it be liable for any loss or damage suffered as a result of any reliance on the information included in this document. Past performance is not a reliable indicator of future performance.
This report is based on information obtained from sources believed to be reliable, we do not make any representation or warranty that it is accurate, complete or up to date. Any opinions contained herein are reasonably held at the time of completion and are subject to change without notice.
.
