Dear Investor,

10 Golden Rules for managing your finances - Part 1

Several years ago, there was an article in the Sydney Morning Herald that described 10 Golden Rules for managing your finances. These rules are timeless and are as apt in today’s investment world as the day they were written.

In this edition of Investor Insights we will describe the first five, and then next month, we will outline the final five.

  1. Manage your debt

    The first golden rule is always to pay off your credit card debt first, because it attracts much higher rates of interest than other loans.

    A great way to speed up this process is to switch to a better deal. The market for credit cards is very competitive, so it can pay to shop around for a low-rate card. Just be aware that any new spending may be charged at a higher rate than that advertised, and you should exercise some restraint.

    You could also consider consolidating your overall debt to reduce your interest payments. Mortgage interest rates are cheaper, compared to those charged on personal loans and credit cards.

    But be careful here because consolidating your debts within your mortgage will work only if you are extremely disciplined and work to reduce them. Long-term debt on a lower interest rate can be just as harmful as short-term debt on higher interest rates.

  2. Limit your credit limits

    Once you have your credit card debt under control, think about reducing your limit. Not only is the extra credit a temptation to spend what you don’t have, but high credit limits are also a liability when you try to apply for finance because the total of these limits are counted as debt, rather than just the amount that you owe.

    Make sure that your credit limits are sufficient only for what you need.

  3. Manage your costs

    Limiting the number of transactions on your account can save you quite a lot over time. If you’re buying groceries, use the Eftpos facility to pay and take cash out at the same time. First, Eftpos usually is cheaper than using an ATM and secondly, the two transactions count as one, which brings down the cost further.

    Some banks will waive fees on your bank account if you hold a mortgage with them. But if your account does charge fees, make sure that they are competitive.

    Bear in mind too that, generally speaking, online savings accounts don’t only offer higher interest, but are also fee-free banking.

  4. Find your lost super and then consolidate your superannuation funds

    About one in three people have “lost” superannuation accounts. If you have changed employers since compulsory superannuation was introduced, but haven’t transferred your accounts, you could be one of them. Multiple funds come with multiple fees and charges, which erode your retirement savings. You may also be paying for insurance cover with more than one fund, for insurance cover that you don’t need.

    To find your lost super, check out the following ASIC website -

    By finding your lost super and rolling over all of your superannuation accounts into one, you can reduce fees and build up your super faster.

  5. Mortgage or Stock Market

    Pay off your mortgage or invest in the stock market? It’s not a crime to invest when you have a mortgage, but make sure that your after-tax return is higher than the interest on your mortgage or it won’t be cost effective. The reason is that by paying off your mortgage you are effectively earning a tax free return that is equivalent to your interest rate. A highest rate taxpayer would need to earn a guaranteed 10.9% return on an investment for it to equal what’s on offer from a mortgage with a 6% interest rate.

Next month, we’ll look at another five Golden Rules for managing your finances.

Lonsec Rating – Recommended

We are also pleased to announce that the Pooled Mortgages Option (“PMO”) has been awarded a “Recommended” rating by independent research house Lonsec. This is the first time that Lonsec has rated the PMO and caps off a tremendous 12 months for the PMO in which it was also rated by the following research houses:

  • Zenith 'Recommended'2;
  • Standard & Poor's '4 stars'3; and
  • SQM Research '4 stars'4.

A copy of the full report for financial advisers can be obtained by clicking on the link below:

Lonsec Report

Pleasingly the research houses are all in agreement that the PMO is worthy of a very high investment rating.

Best regards,
Chris Andrews

The following award and ratings were given to the Pooled Mortgage Option within the La Trobe Financial Mortgage Fund


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Chris Andrews
Head of Funds Management

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La Trobe is one of Australia's leading independent specialist mortgage Financiers. Its business includes residential mortgages, commercial mortgages, and investment services operating one of Australia's largest Mortgage Funds under AFSL 222213. It employs over 145 staff and has raised over AUD$10Billion to assist over 100,000 customers since inception in 1952.

Copyright 2012 La Trobe Financial. All rights reserved. No portion of this may be reproduced, copied, or in any way reused without written permission from La Trobe Financial. Disclaimer

La Trobe Financial Asset Management Limited ABN: 27 007 332 363 and AFSL No: 222213 is the issuer and manager of the La Trobe Australian Mortgage Fund. It is important for you to read the Product Disclosure Statement for the Fund before you make any investment decision. The PDS is available on our website or by calling 1800 818 818. You should consider carefully whether or not investing in the Fund is appropriate for you.
* The rates of return from the Fund are not guaranteed and are determined by future revenue of the Fund, and may achieve lower than expected returns. Past performance is no guarantee of future performance. Investors risk losing some or all of their principal investment. The investment is not a bank deposit.
- Withdrawal rights are subject to liquidity and may be delayed or suspended.
- The award and ratings were given to the Pooled Mortgages Option within the La Trobe Australian Mortgage Fund.
The rating is only one factor to be taken into account in deciding to invest.
1. Lonsec - "recommended" - indicates it has conviction that the fund or product can achieve its objectives and outperform peers over an appropriate timeframe.
The Lonsec Research Pty Ltd ("Lonsec") ABN 11 151 658 561 rating (assigned June 2012) presented in this document is a "class service" (as defined in the Financial Advisers Act 2008 (NZ)) or is limited to "General Advice" and based solely on consideration of the investment merits of the financial product(s). It is not a recommendation to purchase, sell or hold the relevant product(s), and you should seek independent financial advice before investing in this product(s). The rating is subject to change without notice and Lonsec assumes no obligation to update this document following publication. Lonsec receives a fee from the Fund Manager for researching the product(s) using comprehensive and objective criteria.
2. Zenith's "recommended" rating indicates that it has high confidence in the manager meeting its objectives. The Zenith. Investment Partners ("Zenith") ABN 60 332 047 314 rating referred to in this document is limited to "General Advice" (as defined by section 766B of Corporations Act 2001) and based solely on the assessment of the investment merits of the financial product on this basis. It is not a specific recommendation to purchase, sell or hold the relevant product (S), and Zenith advises that individual investors should seek their own independent financial advice before investing in this product. To view the relevant research information, please visit The rating is subject to change without notice and Zenith has no obligation to update this document following publication. Zenith usually receives a fee for rating the fund manager and product against accepted criteria considered comprehensive and objective.
3. SQM Research - 4 stars to 4.25 stars - superior, suitable for inclusion on most Approved Product Lists. To view the relevant research information, please visit This rating will not take into account your, or your clients' objectives, financial situation or needs. It is up to investors to consider whether specific financial products are suitable for your objectives, financial situation or needs. Research houses receive a fee from La Trobe Financial for rating the product.
4. Lipper Leaders Rating Total Return (Score – 5) Lipper Ratings for Total Return reflect funds’ historical return performance relative to peers. The ratings are subject to change every month. The highest 20% of funds in each peer group are named Lipper Leader or a score of 5 for Total Return. Lipper Leader ratings are not intended to predict future results and does not guarantee the accuracy of this information. More information is available at Thomson Reuters Copyright, All Rights Reserved.