Jacqueline Barton

Holidaying off the tourist trail

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When we dream of an overseas holiday, our minds often drift to iconic landmarks, bustling cities, and well-trodden tourist paths. While these destinations have their allure, travel to popular destinations is booming and comes with challenges so there are advantages to venturing off the beaten track and seeking out the hidden gems.

Travel is booming – and creating some headaches

It’s no secret that we Aussies love to travel outside our own country. Last year nearly 10 million of us headed overseas, marking a 12 per cent increase from the previous year, and this year is shaping up to continue the trend.i And it’s not just us enjoying getting out there and travelling the world, global figures anticipate international travel will soon exceed pre-pandemic levels and surpass 2 billion for the second time ever.ii

That adds up to a lot of people out there travelling and some popular destinations are showing the strain with skyrocketing prices, excessive queues, damage at historical sites and environmental impacts all being felt.

Tensions are high in some areas with tourists in Barcelona, Spain recently doused in water by frustrated locals and authorities in the historic city centre of Florence banning new short-term holiday rentals to try to relieve some of the pressure of over-tourism.

Taking the road less travelled can help areas suffering from over-tourism and support those communities who would welcome more visitors.

Supporting communities that need it

Tourism plays a significant role in the economic growth of many communities around the world and there are many places that would really benefit from the tourist dollar. The money you spend as you travel can contribute meaningfully to local economies and help support small businesses, artisans, and entrepreneurs, ensuring that future generations can continue to enjoy unique destinations.

But there are plenty of less altruistic reasons to seek out the hidden gems when you travel though.

Authentic Encounters

One of the lovely aspects of traveling to less touristy places is the opportunity to immerse yourself in local cultures. Away from tourist hotspots, communities maintain their unique traditions, cuisines, and ways of life. Imagine strolling through a market where locals gather to sell fresh produce, handicrafts, and homemade delicacies, or stumbling upon a hidden café where the owner shares stories of their town’s history. These encounters create lasting memories and offer a genuine glimpse into the daily lives of people from different corners of the world.

Unspoiled natural beauty

Nature enthusiasts will find bliss in exploring destinations that are off the typical tourist radar. Picture deserted beaches with powdery sand and crystal-clear waters, hiking trails winding through lush forests, or breathtaking untouched landscapes. Whether you’re seeking solitude in nature or hoping to capture stunning photographs without a sea of selfie sticks in the background, less touristy places often boast natural beauty that remains unspoiled and awe-inspiring.

Affordable adventures

Traveling to less touristy places can also be kinder to your wallet. Accommodation, dining, and activities in popular tourist hubs tend to come with inflated price tags due to high demand. In contrast, destinations that are yet to be discovered by the masses often offer more affordable options. You might find charming family-run guesthouses, budget-friendly eateries serving local dishes, and reasonably priced excursions that allow you to stretch your travel budget further.

Destination dupes

Doing a little homework can point you in the direction of alternatives to popular destinations.

For example, instead of Venice – which is literally sinking under the weight of tourism -consider visiting the town of Trieste, an old port town by the Adriatic Sea. If you are after stunning beaches and clear aqua water, Palawan in the Philippines is a good alternative for the Maldives. Or for an alternative to over touristed St Tropez in France, Turkey’s Bodrum coast offers comparable glamour and affordable luxury. Doing a little research can uncover similar destinations that offer the experience you are seeking, with all the benefits and none of the problems of the overhyped placed.

While the allure of ticking off the list of famous places is understandable, exploring less touristy places offers a wealth of unique experiences to the visitor, and benefits the local communities. So, the next time you plan an overseas holiday, think outside the square of the obvious destinations, and discover the hidden gems.

i CATO reveals new trends with Australia’s 10m international travellers – Travel Weekly

ii 2024 international travel boom predicted – VanillaPlus

Building passive income for a better financial future

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A simple guide from an earlier era suggested eight hours for sleeping, eight hours for work and eight hours for leisure. Nowadays, work seems to take up more than its fair share, and many people might be seeking a way to maintain or increase their income without increasing their working hours. Creating passive income is one way of achieving this goal.

What is ‘passive income’?

Passive income is regular and reliable income that doesn’t rely on constant active involvement. In other words, you get paid multiple times for something you only did once. It sounds too good to be true, but it is possible.

There are numerous opportunities, of which these are just a few:

  • Writing a book, blog or making YouTube videos.
  • Selling products via an online store.
  • Investing in property for rental income and capital growth.
  • Investing in sound, dividend-paying Australian shares.

Some of these options require investment capital, while others require time to establish them.

However, an even simpler way to earn passive income is to pay off debt. If you’re not paying interest on your outstanding credit card debt every month, that money is all yours!

Online businesses

Thousands of businesses are now only web-based, and hundreds more seem to pop up daily. And it doesn’t have to be a business that sells anything – bloggers can earn mega bucks from advertising. Advertisers will gladly pay the owner for space if a site is popular enough.

Internet gurus espouse that this is the way of the future. However, the reality can differ on how many of these businesses are profitable and, just as importantly, how much time is required to make them profitable.

As with any new venture, conduct solid research of existing opportunities or maybe just look around you at what others are doing. Identify a need and a market willing to pay for that need.

It will take time to set things up, but if done right, maybe you can earn “money for nothing”—well, almost!

Investing in your future

One of the great aspects of investing is that your portfolio can be a source of passive income. If you choose to reinvest the passive income you generate, compounding your returns will help your portfolio grow even faster.

Working with a financial planner to help grow your investment portfolio is another great way you can move from relying on your income from working to creating a passive income stream for your future.

Insuring against loss of income

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Protecting income from unexpected illness and injury is particularly important to anyone with a mortgage to service, small business owners and self-employed people with no sick leave available.

With income protection insurance, you can be paid some 70 per cent of your income for a specified period to help when you cannot work.i

The most common claims are for illnesses such as cancer, heart attack, anxiety and depression.ii Payments generally last from two to five years although you can take a policy up to a certain age, such as 65, and the amount is generally based on 70 per cent of your income in the 12 months prior to the injury or illness.iii

For some, income protection insurance may be part and parcel of your superannuation although more commonly this is limited to life insurance, and total and permanent disability cover. But, if you do have income protection insurance in your super, check the extent of the automatic cover as it can be modest.

Alternatively, you could take out a policy outside super where you will enjoy tax deductibility on the premiums. Income protection insurance is the only insurance that is tax deductible. Other life insurance products outside super such as trauma insurance are not tax deductible.iv

Work out a budget

There are many considerations when looking at income protection insurance and the best place to start is to work out your budget, thinking about how much would you need to maintain your family’s lifestyle if you are unable to work. Then you are able to decide on the appropriate level of income protection insurance as well as other factors that affect premiums such as how quickly you might need the payments to start and how long these payments will last.

Many people think income protection insurance is expensive, but you can fine tune policies to suit your budget by changing the percentage payment amount, the length of time for which you would receive the payment and how soon you start getting a payment once you cannot work. Reducing these parameters can reduce your premiums.

Check the policy details

It is important to be mindful of a number of factors that might affect the success of any claim you might make. So, make sure you read the product disclosure statement.

Every insurer has a different definition as to what will trigger a payment, so you need to understand the difference between “own occupation” and “any occupation” for cover. For example, if you are a surgeon and lose capacity in one of your hands, you will receive a payout from your insurer if you have specified “own” occupation because you can no longer work as a surgeon. But if you opt for “any” occupation, then the insurer could argue that you could still work as a doctor just not as a surgeon and the claim may not be paid.

It is also wise to understand that if your policy does not seek your medical history, it is likely there could be limitations to what illnesses are covered.

Another consideration is whether you have stepped or level premiums. Stepped premiums start low and usually increase as you age. Level premiums begin at a higher rate but typically don’t increase until you reach 65. In the long run, level may work out cheaper for some.v You must work at least 20 hours a week to take out income protection insurance and you can usually only buy a policy up to the age of 60. Also, if you receive a payout, you need to declare that income on your tax return.

If you want to check that you have sufficient cover to protect you and your family should you lose your income, then give us a call to discuss.

i Income protection insurance | Moneysmart ( moneysmart.gov.au)

ii The Most Common TPD Claims in Australia with Examples | Aussie Injury Lawyers

iii Income protection insurance | Moneysmart ( moneysmart.gov.au)

iv ATO Community – Stand alone Trauma Insurance and income tax | Australian Tax Office ( community.ato.gov.au)

v Income protection insurance | Moneysmart ( moneysmart.gov.au)

Busting 10 common financial myths

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Navigating the world of personal finance can be challenging, especially with the myriad of myths that may cloud your judgment.

From misconceptions about debt to misunderstandings about investing and retirement planning, these myths can lead to poor financial decisions and missed opportunities. So, we thought we’d bust them once and for all!

Myth: “I’ll never be “good at” money.”

Fact: Financial literacy is a skill that can be learned and improved over time.

Resources such as books, online courses, and financial planners can help you develop better money management and investment skills. Many successful people have improved their financial literacy through education and practice.

Truth: You can be “good at” money. Give yourself some credit; you’ve got this! 

Myth: “I’ll be able to start budgeting/saving/investing once I start earning more money.”

Fact: Effective money management is about making the most of what you have, regardless of income level.

Starting small with budgeting, saving, and investing can build good financial habits that benefit you regardless of income. The key is consistency and discipline, not the amount you start with. Even high-income earners can face financial challenges if they don’t manage their money wisely.

Truth: Let’s be real; you can start now. What’s the harm in trying?

Myth: ‘All debt is bad.’

Fact: Good debt, such as mortgages or student loans, can help build wealth and invest in your future. The important factor is managing debt responsibly and ensuring it fits within your financial plan.

Truth: Shopping on a credit card you only pay the minimum balance on = bad. Investing in high-quality wealth-building assets = priceless.

Myth: ‘You need to buy your home.’

Fact: Whether to buy or rent depends on individual circumstances, including financial stability, career plans, and lifestyle preferences.

While buying a home offers its advantages, renting can be a smart financial decision, depending on your circumstances. It provides flexibility and can sometimes be more affordable than homeownership.

Truth: The Great Australian Dream doesn’t have to be your dream… and that’s ok.

Myth: “It will never happen to me.”

Fact: The most valuable asset for many is your ability to earn an income.

Unfortunately, regardless of age or health, unexpected events can happen to anyone.

Insurance provides financial protection and peace of mind in case of an emergency, accident, or illness.

Truth: The person ‘it’ happened to probably also thought ‘It will never happen to me’“

Myth: “I don’t have enough money to invest.”

Fact: Small, regular investments can grow significantly over time due to the power of compound interest.

Many investment platforms offer a range of low-cost options that allow you to invest with minimal amounts, meaning you don’t need a lot of money to get started growing your wealth!

Truth: No more excuses! Start investing to improve your financial situation. Investing isn’t only for the wealthy!

Myth: “Investing in the stock market is too risky.”

Fact: While the stock market does involve risk, diversification and long-term investing can help reduce this risk and provide substantial growth opportunities.

Educating yourself and seeking advice can make stock market investing accessible to everyone. Financial advisers can help boost your financial literacy and confidence in investing in the market.

It’s not about timing the market, it’s about time in the market.

Truth: Some might say that not investing in the stock market is risky.  

Myth: “I don’t need to worry about retirement until I’m older.”

Fact: Planning and saving for retirement early allows your money to grow through compound interest, and investing across a diversified range of assets, ensuring a more secure financial future.

Early planning also provides strategic opportunities, such as taking advantage of concessional super contributions, which can reduce your taxable income. The earlier you start, the more you can benefit from these strategies, allowing you to build a substantial retirement nest egg over time.

Truth: One day, you’re fresh in the workplace, thinking you don’t need to worry about retirement… Before you know it, you’re 5 years out from retirement, wondering where the last 30 years went!?

Myth: “You don’t need a will or estate plan unless you are rich or have children.”

Fact: Everyone should have a will or estate plan to ensure their assets are distributed according to their wishes, regardless of wealth or family status.

Estate planning can help prevent legal complications, ensure your wishes are honoured, and simplify the process of administering your Estate.

Truth: Make sure you have an Estate Plan in place… if for no other reason than peace of mind and making the lives of your loved ones easier. 

Myth: “You need a lot of money to have a financial planner.”

Fact: Financial planners can provide valuable advice and strategies for people at all income levels.

They can help with budgeting, saving, investing, and planning for future financial goals, making their services beneficial for everyone!

Truth: What came first… the chicken or the egg?

Whether it’s starting to save and invest early, understanding the true value of good debt, or recognising the importance of estate planning, challenging these misconceptions is crucial for making informed decisions and taking control of your financial future.

If you’ve experienced a myth-busting today and are ready to ‘face the facts’, contact us to find out how we can support you on your new path forward.

Economic update video: September 2024

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Welcome to Spring, a season that might be motivational for personal, business and financial renewal. We hope you enjoy the sunshine and warmer weather.

Global stock markets – including the ASX – largely stabilised by the end of August after a turbulent month.

It was a rocky start when markets everywhere fell after news of high unemployment figures in the US and an interest rate move by Japan’s central bank. Despite the dramas, the S&P/ASX 200 closed 1.28% higher for the month marking a gain of just over 10% for the 12 months to date.

A slight drop in inflation figures – down to 3.5% in July from 3.8% the previous month – had investors checking the Reserve Bank’s reaction but most economists agree there’s no chance of an interest rate cut this year. The RBA’s not forecasting inflation to get to its preferred levels until late 2026 or early 2027.

While the cost of living has dropped ever so slightly (and partly due to $300 federal government rebates on electricity bills), wages have risen. The Australian Bureau of Statistics reports that wages rose by 4.1% in the year to June. It means that wages are now keeping up with the cost of living.

The good news from the markets and inflation data contributed to a small upswing in consumer confidence although there’s still much ground to recover after the losses caused by Covid-19.

Watch our economic update video below.