Investing Monthly or Fortnightly
Dollar Cost Averaging - How to Benefit from

You do not need to have a lump sum to start investing.  You can invest either fortnightly, or monthly and benefit from the investment principle of "Dollar Cost Averaging".  You can start with as little as $50 per month into the Private Portfolio Service Master trust range of funds..

Dollar Cost Averaging
Salary Sacrifice

Dollar Cost Averaging  

By investing regularly every month you can benefit from the low's in the market by buying more units for your dollars invested.  Volatile markets such as Asia/Emerging markets and Technology funds are areas where you can really benefit by dollar cost averaging into

.dollar cost averaging

At $200 per month for 5 years with "Company Yellow" the total value of your investment would be $16,543, with "Company Red" you would have $24,157.

You can invest for as little as $50 per month into a fund such as the Private Portfolio Service Master Fund which can give you access to 13 different wholesale fund managers and 21 different funds in the one product.

Click here to contact us and request investment applications or further information. 


Salary Sacrifice (pay less taxes) 

Salary Sacrifice is applicable to employees and business owners on gross salaries above $60,000 per year.

With the Government raising the top tax rate to 39% business owners can drop their tax rate by taking income up to $60,000, paying tax at 33% between $38,000 and $60,000 and paying income in excess of $60,000 into their family trust by way of dividend distribution.  In this way the dividend is taxed at 33% and not their higher level of personal tax rate of 39%.

Paying a dividend into a family trust only works if the company is not LAQC, loss attributing qualifying company.  If it is, the dividend has to be paid out to the beneficiaries which negates some of the benefit.

An alternative to paying a dividend into a family trust is for a shareholder/employee to agree that part of their income is paid directly into an approved superannuation fund.  If an employee withdraws their funds early they will be liable to a 5% withdrawal tax.

An example of how this works is:
If you save $450 per month into an approved superannuation plan you presently need to earn $8,852.46 a year in order to do so because your tax rate is 39 cents in the dollar.

If your tax rate for this was 33 cents in the dollar for the same $8,852.46 of your salary you would pay $531 per year less tax, or $44.25 a month less so that this money could be used as additional savings and there would be no impact to your 'bottom line '.  That's an extra $42,363 in 25 years time assuming a growth rate of 8%, net of tax per year, for doing nothing other than saving via a "salary sacrifice programme".

Your new monthly contribution could be $494.25 a month but your take home pay will not change.

We recommend that you discuss your personal situation with a LYFORDS adviser. 

For further background information refer to our Your Money Column article.