Profit taking was evident in the Australian share market in the month of June, with the All Ordinaries Index falling 1.7% to close the month at 5,382 points. Nevertheless, it was a strong financial year for Australian shares, with the overall market gaining 12.7% for the full financial year.
Global share markets were mixed in June despite escalating violence in Iraq, with the US Dow Jones Index gaining 0.7%, the London the FTSE falling 1.5%, the Hong Kong Hang Seng Index gaining 0.5% and the Japan Nikkei 225 Index gaining 3.6% for the month.
It was a momentous month for my wife and I with the birth of our daughter, Audrey. With the delight of becoming parents for the first time, comes the financial reality that we now have a financial dependent.
One of the key costs for all parents to consider are school fees. While opinions are often divided on the pros and cons of private school, put simply, if you don't plan for the future cost then private school may not be an option for financial reasons.
Let's assume that Audrey will attend private high school in Sydney. The financial reality is that if we wish to put money aside to fully-fund the high school fees, then my wife and I should be saving at least $420 per month effective immediately!
The above chart shows the accumulated value of an education savings plan with $420 per month contributed, private high-school fees of $15,000 per annum (2014 dollars), inflation of 3.5% per annum and an after-tax investment return of 8.0% per annum.
The good news is that we have plenty of time to plan for the future tsunami of school fee expenses. The bad news is that we need to save $420 per month now, while having only one income and paediatrician, hospital and obstetrician bills still arriving in the mail...
Interest rates again remained on hold in June and the RBA met today announcing that the RBA cash rate will remain at 2.50% per annum in July also. The Australian Dollar gained in the June and is currently buying 94.25 US cents.
For more information please contact Ryan Love on 1300 856 338 or e-mail ryan.love@apexpartners.com.au.
This article is general information only and is not intended to be a recommendation. We strongly recommend you seek advice from your financial adviser as to whether this information is appropriate to your needs, financial situation and investment objectives.