Money Magazine May 2017

“An investment in knowledge pays the best interest.” Benjamin Franklin Welcome to our 200th issue ... who would have thought that a magazine that came off the back of a TV show would still have a voice after 18 years. Happy birthday, Money! A big thankyou to everyone who brings this wonderful brand to life and an even bigger thankyou to all our readers for their ongoing support. If you’ve been with us since the very beginning, then you may recognise the cover above – it’s the very first issue of Money. Flicking through it, I noticed that, other than Paul Clitheroe looking absurdly young, our money woes are much the same. Strategies and products have become more sophisticated but our needs really haven’t changed – we still want financial…

Baby boomer dilemma Many believe the baby boomers are not only well off (own their home, have retirement savings) and can also dip into government coffers if needed and feel financially secure. However, this is not necessarily the case. One difficult dilemma for boomers is whether to help the kids get into the property market, as once we have handed over our hard-earned savings we might be depriving ourselves of decent aged care down the track because of the exorbitant bonds and fees charged by commercial providers. Not to mention the restrictions placed on handing over said money to the kids before moving into care (even if not on a pension) when assigning your assets for fees. Jenny, NSW Traveller caught out Readers should be wary of the advice from…

Financial education fails the test I loved Paul Clitheroe’s column on the need to make money “visible” for young people (In Your Interest, April). While we are making some progress we still have a very long way to go. I’ve been teaching high school mathematics for over 20 years, and am still gobsmacked at how little there is in the curriculum about real financial literacy. There are senior students, not far from finishing high school and getting ready for “adulting”, who are brilliant at calculus and abstract vector calculations but know nothing about income tax or credit cards. We do a bit of work on simple and compound interest, and cover profit and loss, but there is so much more that these students need to be covering. I’d happily remove…

STEVE GREATREX Steve is the principal at Wealth On Track. Steve says: “My favourite is The Millionaire Next Door. They studied actual millionaires and found that they spend modestly on things like cars but tend to buy existing homes in established areas.” NICOLA FIELD Nicola is a former chartered accountant and Money contributor. Nicola says: “Effie Zahos’s The Great $20 Adventure. I used this book to teach each of my children basic money skills – distinguishing wants from needs, planning ahead and budgeting. The illustrations are charming and the core messages will last a lifetime.” CHRIS SMITH Chris is founding partner at VISIS Private Wealth. Chris says: “The most inspiring for me was Making Money Made Simple by Noel Whittaker.” MICHAEL SLOAN Michael, director of property advisory firm The Successful Investor, says:…

‘One thing is for sure. When it comes to property it is all about supply and demand.’ “Affordable housing” and the “housing price bubble” are dominating conversation about the property market. Ironically, the much debated housing price bubble popping would certainly sort the affordable housing issue, as a collapse in prices is a very effective way to make housing more affordable. As far as I can tell from following the debate, what we really seem to want is for housing prices to remain strong for those who own property but to fall for those, in particular young first-home buyers, who are yet to buy. Clearly this is not going to happen. Prices will either broadly rise or broadly fall, so large numbers of people will be unhappy regardless. Our politicians…

On July 1, interchange fees will officially be capped by the Reserve Bank at 0.8%, severely curtailing a $2 billion revenue source for lenders, some of which have been charging up to 3% of the value of credit card transactions. Interchange fees are charged by a credit card issuer to the retailer’s bank at the point of sale. A portion goes towards covering the EFT costs; however, the fees are often a lot higher than the actual cost. The new cap could have repercussions for the millions of Australians with a rewards credit card. That’s because most rewards programs are funded by money collected from interchange fees, and that’s all about to come to a grinding halt. The credit card market is already being shaken up in anticipation of these…