Income investing: boost your earnings through investments
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Like most things in life, a good education doesn’t just ‘happen’; it needs to be planned. As education costs soar and your list of options grows, it’s easy for time-strapped executives to feel overwhelmed. Poole Advisory can help you navigate these challenges and prepare a tailored financial plan to secure your child’s education.
Regardless of where you sit on the ‘private versus public’ school debate, there’s a clear and alarming trend in Australia: education is becoming increasingly expensive.
According to the 2023 Cost of Schooling in Australia Report by Futurity Investment Group, even “free” public education could cost close to $90,000 over their lifetime.
Location | Government | Catholic | Independent/Private |
Sydney | $89,500 | $178,478 | $357,931 |
NSW (regional and remote) | $82.823 | $158.553 | $218,732 |
It seems that as the competition heats up for places at the perceived pointy end of education, costs will only increase further. By 2033, some of the top private schools in Sydney are tipped to charge fees of more than $50,000 a year.
In addition to school fees and tuition, you also need to consider costs such as:
Once you factor in events such as graduation, school photos, or school-sponsored trips, the overall costs can well and truly skyrocket. That’s before your child reaches university, which many parents want to prepare for financially as well.
The unpredictable rise in education costs shows how important it is to start planning, regardless of your child’s age. Consistent contributions will accumulate over time and make your future expenses more manageable. The following options may be suitable when investing for your children’s education costs.
Also known as Scholarship Funds or Education Bonds, an education savings account is a type of investment specifically for education costs.
A trust is a legal arrangement where assets are managed by a trustee (you) for the benefit of beneficiaries (your children). Trusts can be a great way to set aside and grow funds specifically for educational expenses.
You can read more about the advantages and disadvantages of trusts here.
Not to be confused with government or corporate Bonds, an investment bond combines the features of both a life insurance policy and a managed fund. Investment bonds are known as a ‘tax paid’ investment because the tax on earnings is paid by the issuing company at a rate of 30%.
Providing you hold the bond for 10+ years, your withdrawals are tax-free outside of the issuing company’s 30% rate. Additional contributions are considered part of the initial investment and get the same tax benefits if you meet the 125% rule (your annual contribution cannot be more than 125% of your previous year’s contribution).
If you’d like to delve deeper into the advantages and disadvantages of investment bonds, check out blog articles Investment Bonds Part 1 and Investment Bonds Part 2.
It’s never too soon (or too late) to make a sound financial plan for your child’s education fund. If you are short on time, we recommend following these four simple steps as an ideal starting point:
The rising costs and complexities of Australia’s education system may seem daunting, especially if you’re a busy executive juggling work and family. However, with strategic planning, smart investment choices, and some expert guidance, the path to securing your child’s educational future will become a whole lot clearer.
Poole Advisory is based in Bowral in the Southern Highlands, but we also have an office in Sydney and offer online meetings – so we’re able to service clients from all over. You can get in touch here with any questions, or book a complimentary introductory consultation with our Principal Financial Advisor, Anthony Poole.
Compliance Disclaimer:
This information contains general advice only, that is, advice which does not take into account your needs, objectives, or financial situation. You need to consider the appropriateness of that general advice in light of your personal circumstances before acting on the advice. You should obtain and consider the Product Disclosure Statement for any product discussed before making a decision to acquire that product. You should obtain financial or credit advice that addresses your specific needs and situation before making investment or borrowing decisions. Taxation information is based on our interpretation of the relevant laws as at 1 July 2018. While every care has been taken in the preparation of this information, Prosperitas Partners Pty Ltd does not guarantee the accuracy or completeness of the information. The case studies are hypothetical, for illustration purposes only and are not based on actual returns
Poole Advisory Pty Ltd ABN 15 642 040 604 is a Corporate Authorised Representative (No. 001282603) of Prosperitas Partners Pty Ltd ABN 30 662 654 453 AFSL 544 917
Wondering whether to combine finances after saying ‘I do’? Get tips on budgeting, joint accounts, and achieving your financial goals in married life.
Wondering whether to combine finances after saying ‘I do’? Get tips on budgeting, joint accounts, and achieving your financial goals in married life.
Wondering whether to combine finances after saying ‘I do’? Get tips on budgeting, joint accounts, and achieving your financial goals in married life.
Wondering whether to combine finances after saying ‘I do’? Get tips on budgeting, joint accounts, and achieving your financial goals in married life.
Wondering whether to combine finances after saying ‘I do’? Get tips on budgeting, joint accounts, and achieving your financial goals in married life.