Independent Empower Wealth Review: Getting the Property Experts in.

 

This is a part of a series of articles outlining my experience buying properties with Empower Wealth. I had carefully considered whether to invest in property or the stock market. I am doing both! But my financial plan required us to invest in property first. We plan to purchase two (or maybe three) properties and pivot to index ETF investing. Five years before a fairly early retirement at 55, we will enter debt repayment.

I first heard about Empower wealth by stumbling across the Property Couch podcasts. I greedily consumed 200+ free episodes full of property intelligence. 

Being a natural cheapskate shrewd financial manager, I intended to educate myself, select a property and purchase using as much cheap/free information as I could find.  

See my article on what convinced me to fork out for professional assistance.

Hopefully, budding property investors will find this article helpful in deciding whether to use the Empower Wealth business to achieve their property purchase.

This is a completely independent review without sponsorship or commissions based on my own experience. 

Best buyers agent, empower wealth review

 

A Warning About Free Advice

Remember to consider who is paying your financial planner or property advisor. Free advice can be far more expensive in the long run. Most family and friends I know who have invested in property now regret it. They took guidance from commission-based property developers.

What started for them as high expectations to achieve a retirement funded by property ended in stress and financial loss.

Be very careful who you take advice from. If they are well-meaning family or friends, make sure they are now in the financial position you want to be in (ie they have achieved their goals). If it is a professional, you need to pay them (or you are the product!).

Empower Wealth Review: Initial Contact

I was initially unsure which of the Empower Wealth Services I required. So I spent time talking to several Empower Wealth professionals to understand their respective roles.

It took a couple of weeks each time to get an appointment. 

Between my first contact with the company and the actual property purchase was around four months. Part of that was our fault, a family holiday meant we were away from home, unable to give house valuers access and send paperwork promptly.

Empower wealth is based in Melbourne, but offer appointments face to face, by phone or online video conference via Zoom. I chose to video conference via zoom and the process was pretty simple.

How it Works

The team send a request for you to complete detailed financial information on their website.

This is used to check your current financial situation, that you can afford an investment property, and are likely to secure lending.

If you have already gathered all the information to do your own sums, it doesn’t take too long to put it into the database, and I also found it useful to double-check my numbers.

It’s really important you spend the time inputting as accurate data as possible before your appointment. The information gathered will be used to give initial advice, and then to form a property portfolio plan.

Empower wealth offer lots of different services, including a property portfolio plan, mortgage broker, buyers agent, tax agents and asset protection advice.

If you’re not sure which services you want or need, the initial chat will help clarify.

Services I Used

I did not use the property portfolio plan service. At the time I was scraping together every dollar I could get my hands on.

The buyer’s agent fee seemed like a lot of money, and the empower wealth property plan cost just seemed too much. I felt the first few steps I needed to take were pretty obvious. I found The Armchair Guide to Property Investing very helpful, had made a basic plan of my own with the mother of all excel sheets. My first step was to buy a growth focussed property.

I retrospect, it probably would have been better to use the planning service. Empower wealth could check my thinking, maths and confirm or tweak the plan. I am still unsure whether to buy a 3rd property, but for now, have paused and pivoted to shares. I may still go back to use the planning service to help with this decision.

I did use the Mortgage broker and buyers agent service.

 

Empower Wealth Review: Mortgage Broker

I met first with my mortgage Broker, Sarah, who was lovely and keen to answer all my questions.

The entire company has a streamlined process, so after that initial appointment, things ran extremely smoothly. Maybe the health system could pick up a few hints to provide a more efficient service!

Securing lending was somewhat time-consuming. It involved organizing and sending in lots of paperwork, then getting our house valued in person. It is possible sometimes to base lending on a “Desktop valuation” that is performed without a visit to the property, although for us this came in far lower than expected. Our house is quite different from the surrounding properties, I am guessing this is why the algorithms struggle to value it.

Getting the mortgages structured in the most cost-effective way took some extra time. It took around three weeks for the pre-approval in order for us to start house hunting.

There are many factors other than interest rates that matter for mortgages, particularly for those building a property portfolio. Your mortgage broker can help you navigate the options.

We’ve used Empower wealth mortgage brokers for our second investment property in March 2021. Things were not as well streamlined this time.  I’m sure a lot of this was due to COVID, with staff working from home (some no doubt trying to home school as well). I have the impression though that Empower Wealth is suffering growing pains with the rapid expansion of their business as the word is spreading.

Leave plenty of time. I would suggest contacting Empower wealth before you are ready to buy, to get all the initial processes sorted whilst you continue to save. Remember to check your credit score, and avoid any credit checks (eg for credit cards) in the six months leading up to the loan application.

Using Empower wealth’s mortgage broking team gave me a $1000 discount on the buyer’s agent fee.

Empower Wealth Review: Buyers Agent

My initial contact with the buyer’s agent process was for an introductory chat.

I didn’t warm to the gentleman I spoke to. I was horrified at the suggestion that I should buy a property unseen.

I had developed a fair degree of trust in the Empower wealth team, through listening to their friendly and informative Property Couch podcast. But I was still very nervous, terrified of making a mistake with what would be my biggest financial decision so far.

Like a jittery first-time mum being wheeled into the theatre for a caesarean, I needed a lot of reassurance and hand-holding to feel more confident in the process.

I reached out to colleagues online, to find if anyone had used Empower wealth – and the response I got was overwhelmingly positive.

“They are one of the good guys,” wrote one of the doctors I had never met.

“Growth so far has been on target,” said another.

In general, our profession has strong ethics.

I trust reviews from one of us far more than the testimonials on a website, or Google reviews.

It’s just reassuring to hear from one of your own tribe.

I went ahead with the process and asked to be allocated to a buyer’s agent.

My Buyers Agent

A buyer’s agent is a property investment advisor who will help you select a great property with good future value expectations. I spoke to mine, Nicole, via zoom. The experience of meeting her by video chat was great.

She told me about her career and property investment journey. Previously, with financial planners, these transparent attempts to relax a client and build rapport make me cringe and felt incredibly fake, but not with Nicole.

There had to be a leap of faith at some point, where I trusted my property investment advisor Nicole knew what she was doing and pointing me in the right direction, getting to know her helped this.

My buyer’s agent was a very personable, bubbly person oozing with knowledge and confidence, without arrogance. She made me feel completely at ease and comfortable talking with her. Her professionalism, expertise, and interpersonal skills showed in each interaction (and there were many).

The first chat with Nicole was for over an hour, we talked through my goals, my pre-conceived ideas about what I would purchase, and my knowledge level.

She explained the process step by step and what would happen next.

A Property Bluprint

Based on this conversation, she compiled a “Property blueprint” – a lengthy document shortlisting twelve suburbs (Brisbane and Geelong) that she thought were promising.

The document listed key data and explained why the buyer’s agents thought they were a good fit. I had spent quite a bit of time looking at data and trying to narrow down suburbs on my own, before giving up and going with Empower wealth. Only one of the suburbs matched my own shortlist…interesting!

At this point, guided strongly by Nicole, I confirmed Brisbane as my target area, and then the wait began. Nicole was very familiar with the Brisbane market, having purchased many properties there beforehand.

Nicole was soon on a plane to view several shortlisted properties. By this point, my thinking had changed quite dramatically. I trusted Nicole and was fully aware she knew what she was doing. I came to feel my viewing the property wasn’t going to add anything to the process, and may result in too much delay.

Empower Wealth Fees

The fees at the time of purchase were $15,000 buyers agent, discounted to $14,000 as I also used the mortgage broking service. This seemed like a huge amount of money at the time. In retrospect, it represented excellent value.

The Search for a Property

Nicole sent me three properties with potential, including detailed video footage of the viewings.

One great property was her recommendation, and Nicole gave me the confidence to make the big decision. I have to admit I was completely terrified. Buying a property is a huge financial decision and I felt wobbly. What if this was a huge mistake? But at the end of the day, I reasoned, I couldn’t do any more meaningful research that would make me more sure of my decision. I had to (reluctantly) accept some minimized risk. I am no gambler!

Negotiation

Then came a few days of back and forth discussion and negotiations. There was another interested buyer who had also put in an offer.

Nicole helped me set an appropriate price to offer. She saved me her fee right here as I would have offered more to ensure we sealed the deal. Nicole’s experience was invaluable in knowing where to set the price and other factors that we could use to make our offer look more attractive. She also put stipulations in the contract for the seller to perform certain repairs.

I was surprised by how much negotiating power my buyer’s agent thought we had, especially as I was competing with another buyer! I think the involvement of a professional buyer’s agent made our offer more attractive – the settlement was expected to be smooth and uneventful.

It turned out a quick settlement was what motivated the seller, and I had the team execute the deal fast!

Empower Wealth Review: Settlement

The contract was signed, buildings and pest inspections and solicitor work ensued. My buyer’s agent assisted with interpreting the buildings and pest inspection report.

The team took me through everything step by step. They integrated with the solicitors, buildings and pest inspectors seamlessly as they frequently use their services. Like in a well-run resuscitation, there were clearly delineated roles and plenty of closed-loop communication. Everything ran smoothly.

The bank coughed up the cash as expected, and I was the proud owner of my 1st investment property.

Becoming Landlords

The Empower Wealth team then suggested a choice of rental managers, and the search for a tenant began before settlement.

I got to see the names, ages, professions and even income of the tenants, and also what pets they owned.

I had planned to avoid tenants with pets, as I was concerned about damage, but all four tenants had pets. Advice from my rental agency was that it would be difficult to find a tenant without pets and that laws are changing so that tenants cannot be discriminated against for owning pets.

So again, I had to take a leap of faith that it will be OK, organized building and rental insurance. Fingers crossed these tenants and their pets are well behaved – they sound just lovely.

Cash-flow Management

Empower wealth offers a free cash-flow management platform on their website called Money Smarts. Their system is described in their “Making money simple again book“.

The Money Smarts system is available free to anyone who wants to manage their finances for a better future.. You do not have to be an Empower wealth client!

I based my investing plan on conservative assumptions. My calculations were based on 6% interest rates (interest rates are currently <3%). I made sure I had buffer money in my account, in case of unexpected expenses.

With this (and, admittedly, a strong income) debt repayments have not been onerous. The rent lands in our account. The mortgage repayment goes back. There is a shortfall, but it’s very manageable.

Other Empower Wealth Reviews

Empower wealth advertises their testimonials from satisfied clients. Financial Advisory Client Testimonials – Empower Wealth I confess, I am always doubtful whether these testimonials displayed on websites are genuine. But I am pretty much converted to a raving fan after my experience. Empower wealth wasn’t perfect, but they were a damn sight closer than any other professionals I have engaged in the past.

Investing with Empower Wealth

Overall I was extremely impressed with Empower Wealth‘s service in helping me buy an investment property. If you want to read what happened next, read the update: Do I regret investing in property: the first six months. And then, for my experience as a landlord through the global pandemic and beyond!

Find out about the Victorian residential tenancy act changes. future plans property plan retirement plans fantastic model property couch only time will tell

Aussie Doc Freedom is not a financial adviser and does not offer any advice.  Information on this website is purely a description of my experiences and learning.  Please check with your independent financial adviser or accountant before making any changes.

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Thinking of Starting a Family? Plan Ahead

*This post may contain affiliate links. This means if you purchase through the link I will receive a small commission at no cost to you. It is the way sites like this are funded, but does introduce a conflict of interest.  

Thinking of Starting a Family? Plan Ahead

Questions about balancing work and starting a family are commonly asked by junior doctors.  For those wondering, there really is no perfect time to start your family.  It will always be challenging, but wonderful to have these competing interests in your life.

For those not interested in starting a family or not ready yet, harness the financial super powers of DINKs here.

Some choose to start early, enjoying relatively youthful parenting, others wait until most of the hard career climbing years are over, aware that time is always ticking away. This is a personal choice, and different options obviously suit different families.  But there are a few issues to be aware of, and plan around to minimize financial stress.

Thinking of Starting a Family? Plan Ahead

Time to Bond…

In order to be legally entitled to parental leave, you have to have been employed by your employer for twelve months before the actual, or expected date of birth, date of adoption, or 1st day of leave.  The legal entitlement is to 52 weeks of unpaid leave, with an option to request a further 52 weeks (although the employer can decline this).

The Australian Health system has generous parental leave benefits available, but due to the widespread use of temporary contracts, and being required to move hospitals for training, many doctors have missed out on paid parental leave (PPL).  PPL is definitely worth considering the timing for, as it will give most families far more time to bond.  It is also worth having union membership and attempting to get leave entitlements transferred between health services.  If you are planning to stay in one health service for a long period, it is possible to negotiate a contract for more than one year.  There is some variation in maternity leave according to health service.  Leave can generally be taken at half pay for twice as long.

Entitled after Paid parental leave Paid Paternal Leave
NSW 40 weeks 14 weeks Paid 1 week
VIC 12 months 10 weeks Paid 1 week
QLD 12 months 14 weeks Paid 1 week
WA 12 months 14 weeks Unpaid
ACT 12 months 18 weeks Paid 2 weeks
TAS

SA

NT

12 months

12 months

12 months

12 weeks

16 weeks (20 weeks if employed by SA for 5 years +!)

14 weeks (18 weeks if employed by NT health for 5 years +)

Unpaid

1 week paid

0-2 weeks paid depending on length of service

Obviously, if you are self-employed (as a GP or private specialist), you’re on your own!  Forward planning and lots of savings will obviously make the financial stress far less of a burden.

The Government provide Paid Parental Leave for 18 weeks at the National Minimum Wage to the baby’s primary caregiver if they earned less than $150,000 during the previous financial year.  There are detailed eligibility criteria on the website linked, but working mothers are entitled to this even if they are receiving PPL from work.  It is paid via your employer.  If you are self-employed, or not eligible for maternity leave this will help ends meet, and be gratefully received.  If you are in the fortunate position of being paid PPL from work, this government PPL is a nice bonus that could get lost in the weekly expenses if not consciously allocated.  Many parents use this allowance to start an education fund for their baby if it is not needed to fund maternity leave.

The Government also pay Dad and Partner pay – up to two weeks at National Minimum Wage for working dads, but they must not be being paid by work at the same time

Training Considerations

AHPRA requires all registered doctors to meet minimum CPD standards per year (As per specialty or for general registration 50 hours over 1 year) plus have recency of practice standards: 152 hours within a registration period OR 456 hours over three registration periods.  These are not too difficult to meet despite the extended time off as long as you plan ahead.

There is wide variation in how the specialty colleges treat maternity leave, and this, unfortunately, encourages more females to leave certain training programs. Most colleges have a maximum training time, and this can be an issue for parents wanting multiple children.  It is worth checking your college’s requirements well before the baby is expected!

Planning Finances for Parental Leave…

It is essential to plan in detail, making sure you’re prepared for the financial challenges of taking time off will help take the pressure off and allow you to focus on the most important thing – your family.

Calculate Your Anticipated Expenses –

It’s time for a good old-fashioned budget!  In my experience, these fanciful spreadsheets show little correlation to what is actually spent! PocketBook is a free app that you can link all bank accounts and credit cards, to categorize what was actually spent over a 12-month period.  Sign up, ensure your expenses are categorized appropriately and use it to project anticipated monthly expenses during your time off.

You may be able to save on professional expenses during parental leave.  “Run off Cover Scheme” allows you to have ongoing medical indemnity cover whilst not working for FREE.  Call your medical indemnity insurer to enquire.  AHPRA and specialty colleges MAY offer a discount depending on how long and the timing of your break from work.

Work out Your Anticipated Income –

  • PPL from work
  • Partner income
  • Government PPL
  • Government dad and partner pay
  • How long are you taking off work?
  • Will you supplement with any part-time work before going back to work fully?

Calculate Income Minus Expenses –

Does anyone EVER come up with surplus income after completing this calculation?! If you’re in the black, check you’ve done the maths right and move on to the next step

If you’re in the red, time to go over those expenses with a fine-tooth comb.  What can be reduced or cut out to allow you the time off you desire?

Savings plan –

If you’re still in the red, time to work out how much time you have until starting maternity leave.  Calculate how much you need to save per paycheck. Moneysmart has a handy savings calculator.  A mortgage offset account is the best place to store these savings, or a high-interest savings account if you aren’t mortgaged up.

It’s not an uncommon time to feel overwhelmed with competing demands for your savings.  Read about getting over money challenges.

Planning for the Future

Your Future

Rarely do you get ahead by thinking short-term. Women currently retire with an average 47% less than men.  Maternity leave and part-time work are significant contributors to the gap.

Spouse Super Contributions – If you or your partner will earn less than $40K in a financial year, the higher income earner can claim up to $540 tax offset by contributing $3000 to your super ($120/FN).

Government Co-Contribution – If you or your partner earn less than $57K in a financial year and make $1000 after-tax contributions ($40/FN), the government will partially match your contributions with up to $500!

Maximise your Concessional Super Contribution – If you’re not maxing this out, consider salary sacrificing extra in to super

Your Family’s Future

Consider your ongoing budget after the baby is born.  When are you and your partner going back to work?  Full or part-time?  Are you planning a house move?  Private education?  What would you like your lifestyle to look like?  Can you afford it?  Do you need to make any changes to your expenses to save for the future?

Your Child’s Future

Do you wish to save for your child’s education costs, university, or house deposit?  Consider whether you would like to automate a small amount of savings towards your goals for your child each paycheck. Pearler, Vanguard personal investor and your super allow automated direct debit deposits into the stock market.  If you need a little more help, consider a micro-investment account like RAIZ who simplify the process even more.

My Pearler and RAIZ reviews are available for you to review.

Regardless of whether you want to give your child a financial step up, Scott Pape’s (The Barefoot Investor) book on money & kids is a great resource.   Also, check out the full article on how and where to save for your child.

Shopping for Baby

It’s probably best you get a firm understanding of your financial situation before going wild shopping for your little one. Baby preparation costs range from zero to thousands of dollars.  It is so tempting to buy the “Best” (aka most expensive) or everything, but this benefits… who?  The bub doesn’t care, and it won’t benefit your family if you actually can’t afford it.  So work out what situation you are in, what, if anything you would like to splurge on and consider asking family, friends, and workmates for much-loved hand-me-downs.

Best of luck with your family plans.  A little bit of forward planning can make things smoother.  But even if you have a “Surprise” baby, you can work through the steps above to work out your position and make it work for you.



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A Quick and Easy Guide to Superannuation Australia

A Quick and Easy Guide to Super for Interns

Congratulations on showing even passing interest in super at such an early stage of your career!  A little bit of forward thinking at this stage will be a major factor in defining your wealth long-term.  Small steps like ensuring you’re in an appropriate super fund, in the right asset allocation and optimizing your contributions have a massive effect when played out over 30 or 40 years of compound growth on your side!  If you have a little less time don’t worry.  It’s still likely the longest stretch of time you will invest.

Super Powers: Compound Interest and Tax Minimisation

Compound Interest Calculator from Moneysmart.gov.au

This graph demonstrates the amazing effect of compound interest over a 40-year period.  By far the most powerful factor in your lifetime wealth is time investing.

These calculations are based on an intern earning $70,000 whose employer is contributing 9.5% contributions, taxed at 15% ($217/FN net).  Growth is assumed at 7%, with a 1% fee.  This is assuming you never earn more than an average intern wage!

Unfortunately, inflation also has to be considered, so in today’s money, this would be worth around $436000 (assuming 3% inflation).

Easy Guide to Super: Protect your Super from Highway Robbery

Fees are the next major factor that will make an impact on your long-term wealth.   Check what fees you are paying – ideally under 1%, over 2% and you are being taken for a ride.

Some financial advisors will try to charge up to 4%.  Over time, these excessive fees just don’t pay off.

You’ve all heard the adverts – multiple super funds charge you multiple fees, and you’re best off combining them. Do you have any puny super balances from pre-or during medical school?  If so, remember that tiny balance could grow significantly over 40 years…or be eaten up by fees and lost. You can probably get this done in ten minutes!  The ATO can help locate your lost super, and you can roll super from one fund to the other directly on the same site.  Alternatively, you can contact your super funds or find their “Rollover” forms on the website.

Insurance is a big topic.  Check out what you have through your Super, and think about what you need.  Consider seeing an insurance broker if you feel you need better coverage.

Beware some super income protection is only for 2 years.  If your super fund hasn’t received contributions or a rollover in 16 months your insurance gets canceled unless you contact them.  If considering canceling insurance, consider that if you develop a chronic medical condition in the meantime you may not be able to secure insurance again. If children are in your future you are likely to need significant insurance in the future.

Easy Guide to Super: Choose Carefully but Make the Decision

Choosing a super fund can seem overwhelming.  Take an evening to look at the options and make a decision.  Review this every ~ 5 years or when you change employers.  Canstar has a great resource to help review your employer’s default fund and narrow down alternatives if appropriate.  Important factors to look at are fees, insurance, and long-term performance (Over 10+ years).

Asset allocation is another important decision that you should consider early in your intern year.  If you do not make a choice, your super will generally be put into a default “Balanced” fund.

When thinking about asset allocation, consider athe number of years to retirement – generally consider more aggressive allocations with longer to go before retirement.

More aggressive portfolios are expected to deliver higher returns over the long term but are associated with higher volatility.

If you choose a higher volatility fund, you need to be able to ride out severe market downturns.  If you are going to panic and sell during a market crash, a lower volatility choice is likely to perform better for you. MoneySmart has an article on choosing your fund allocation.

Optimise Contributions – Claim All Free Money Available

When I signed up for my first post, I stared at the super options (including how much to contribute) in confusion and followed the advice of a random HR person as to which box to tick!

I’m hoping you will go in a bit better informed!

You will have an option to designate a super fund or allow your employer to pay into their default fund on your behalf.  A minimum of 9.5% is paid by your employer into your super by law, but some employers will pay extra if you contribute voluntarily.  I encourage you to contribute what you need to get the full extra employer contribution if it’s an option.  Again, it’s free money, and you will never miss it if this starts from your 1st paycheck!

In your 1st year, and any time you take a career break you have a special opportunity to claim free money into super. If you have income less than $37697 (which is likely in your intern year as you start work halfway through the tax year), and make a voluntary contribution of $1000 (or $40 per fortnight) the government will give you $500 free money (into super)!

That is a 50% guaranteed, risk-free return!

If anyone else offers you this, they are probably trying to scam you, it’s too good to be true.

Even if you earn up to ~$50,000 in a financial year, you will get some benefit.  Details on the ATO website, but it’s very simple to set up a BPAY every pay cycle to your super account and then claim it on your tax return.  Amazingly, if you claimed the 1st year’s co-contribution and then continued paying the extra $40 per fortnight into super over 40 years you would be $177,043 better off (Assuming Net 6% growth).

The biggest factor that puts people off putting extra cash into super is legislative risk.  The government has a habit of fiddling with super, and delays to future preservation age are likely.  The lack of control you have over your super is a reason to be cautious about putting lots extra in years ahead, but small amounts really add up.  Consider putting in an amount you won’t miss, especially when rewarded by a tax offset or co-contribution.

Read about salary sacrificing superannuation contributions here.  

If you have worked through this list, I think you’re WAY ahead of the pack in building your future wealth. Good luck with your internship, I hope your patients are interesting and your colleagues supportive.   Enjoy!

Check out the up-to-date guide to choosing your super fund.

Your wealth accumulation journey starts as soon as you make the first step. Subscribe to Aussie doc for a weekly email to keep you up to date on track with your goals.

Aussie Doc Freedom is not a financial adviser and does not offer any advice.  Information on this website is purely a description of my experiences and learning.  Please check with your independent financial adviser or accountant before making any changes.

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