Innholdsfortegnelse for July 2017 i Money Magazine

“Wealth is not about having a lot of money; it’s about having a lot of options.” CHRIS ROCK, ACTOR/COMEDIAN We had some great feedback on last month’s cover story, “Why you only need $275k in super to retire”. The sweet spot to retirement is certainly a soft spot for a lot of our readers. Some feedback was good, such as that from Kerry on Twitter who described it as “a practical approach to retirement”. Others, like Martin on email, were not so positive: “As a hardworking gen Y taxpayer I am aghast at the thought of all my annual taxes going towards older generations who have failed to adequately provide for themselves.” You can read more reader comments below. Good or bad, last month’s issue got us talking about…

ADRIAN RAFTERY Adrian, Mr Taxman, is an associate professor at Deakin University and author. Adrian says: “I always wanted to sip beers, eating lobster on a crystal-clear beach in the Caribbean. However, since super became so tax attractive in recent years, I am staying in Australia. Best country in the world with next to no tax. Utopia!” CATHERINE SHAR-PLES-RUSHBROOKE Catherine is a strategic financial planner and director at Advice Services Australia. Catherine says: “In my dream retirement I am physically, mentally and financially fit enough to enjoy life – spending time with family and friends, travelling and learning new things.” LAURA MENSCHIK Laura is a financial planner and director of WLM Financial Services. Laura says: “It includes continuing to be mentally stimulated, for example in using my skills in volunteering…

Millennials looking to make headway into the property market are not the only ones feeling the pinch. Spare a thought for their parents who, by default, are postponing their retirement plans to support their offspring for longer while they battle Australia’s housing affordability challenge. The younger cohort, unable to deploy independent means to get on the housing ladder, are increasingly reliant on their parents to help them flee the nest. As such, baby boomers are becoming accustomed to the “new normal” of dipping into their savings, often in the form of home equity, to fund their children’s futures. Some are stumping up the deposit, or using their own home as collateral. Others are subsidising mortgage repayments and, increasingly, more parents will extend the family home, repurposing the garage or remodelling…

THE NEW CHINESE Barry Li Wiley Publishing, RRP $29.95 Over the past 30 years, China has emerged as a world leader, politically and economically. As a young nation built on immigration, Australia, in 2017, has a large Chinese community so it’s vital for business leaders to be able to market assets to this community. Chinese-born Australian academic and accountant Barry Li, in his book The New Chinese, draws attention to cultural nuances and discusses how to navigate differences. China is an economic superpower with a sustained interest in Australia; understanding how to engage with it should give a business a competitive edge. Ten readers can win a copy. In 25 words or less, what’s your best tip for navigating cultural differences in business? Send entries to Book of the Month,…

A badly timed interest rate increase can be all it takes to break the budget of a homeowner. And with many banks raising their variable interest rates, it’s easy to feel nervous about the future. Speculation about further rises makes fixing your interest rate tempting. Currently, the cheapest fixed three-year home loan on the RateCity database is with Easy Street Financial Services at 3.59%pa (advertised rate). This is only a touch above the cheapest variable rate on the market, the Reduce Home Loans Rate Buster at 3.44%pa. Even if the banks and the Reserve Bank hike rates, your fixed-rate repayments will remain consistent from month to month. This can make budgeting much simpler, which can be handy for households, especially first-time buyers, with stretched finances. For property investors, fixed rates…

Most people under 75 are now able to claim a tax deduction for after-tax contributions to super. The condition that less than 10% of your income must come from salary and wages was scrapped from July 1. If you’re aged between 65 and 74, though, you will need to meet the work test. What you claim will count towards your concessional cap of $25,000 – not the non-concessional cap, which is much higher. If you want to claim a tax deduction for personal contributions, you must lodge a notice of intent with your super fund and have this notice acknowledged (in writing) by your fund. You can find the relevant form on the tax office website ato.gov.au. If you claim a deduction for your personal contributions you may not be…

DuluxGroup lives up to the decades-old slogan of its Berger paint brand: the company “keeps on keeping on”. For the half-year results to March 31 this year, it produced sales growth of almost 5% in Australia, compared with market growth of only 0.5%. This division contributes half the group’s sales but more than two-thirds of profit. It’s a fantastic business with operating margins above 17% and a market share of around 46%. The remainder of DuluxGroup’s businesses aren’t as strong but the best of them is Selleys Parchem, which manufactures the ubiquitous No More Gaps flexible filler as well as construction chemicals. Here earnings rose 11% on flat sales due to cost reductions. In total, the company’s first-half sales rose 4%, while underlying net profit rose 9%. DuluxGroup is not…

STEVE GREATREX Steve is a financial planner and founder of Wealth on Track based in Adelaide.wealthontrack.com.au First, I think the fee that you have been asked to pay for financial advice seems on the high side, particularly from a bank planner, though the bank you went to has a reputation for charging excessive fees. Find an adviser who has good reviews from clients and who is well qualified and works nearby. If you want guaranteed returns you really can only use a bank with term deposits. Because Bill is working, he pays some tax now – $2700 last year. So it may be worth considering moving your money into superannuation and then starting an account-based pension (or income stream). The latter will have zero tax on the earnings and zero…

What is it? Friday, July 21, is National Pyjama Day, which raises awareness of, and funds for, children in foster care. Hosted by the Pyjama Foundation, the annual event encourages participants to host a fundraising event at their home or workplace. You can host an event, attend an event in your pyjamas or simply make a donation on the day. The way you host your party is up to you – popular choices include morning teas, book readings and pyjama discos at schools. Just remember to remind your attendees to make a donation on the day. Where your money goes: The Pyjama Foundation was founded in 2004 to make a positive impact on the lives of vulnerable children in foster care. The event raised more than $10,000 last year to…

It is a familiar story among my friends. Their ageing parents are growing frail and need more help with daily living. It could be triggered by ill health or an accident but they can’t continue as they once did. Often the elderly are overwhelmed by the many decisions they need to make about their finances, care needs and housing. Many procrastinate and things get worse. My friends are run ragged, squeezing in visits to their aged parents between the demands of their work and own family. They are often unaware that there is a wide range of well-priced assistance that will help the elderly remain in the family home or, if they need to, move into a retirement village or residential care. And in many cases their parents would qualify…

MONEY TROUBLES TAKE A HIGH TOLL • Financial issues were rated as the top cause of stress from 2011 to 2015, according to the most recent Stress and Wellbeing in Australia survey from the Australian Psychological Society. A study by National Australia Bank found that 2 million people experience severe or high financial stress or vulnerability. Here are a few things you can do if you find yourself in financial distress. Financial distress occurs when a person or family is struggling to meet their personal or business expenses. We saw widespread mortgage stress across the US during the GFC and a corresponding rise of the debt consolidation industry in Australia during the same period. But what do you do when you can’t pay your bills, and how can you help…

THE STORY SO FAR The Australian Prudential Regulation Authority (APRA) has already had a couple of goes at cooling the property investment lending market. In December 2014 it introduced a limit of 10% a year on growth in lending to property investors. It also warned it would not look kindly on lenders doing a lot of high-risk lending, such as lending at high loan-to-valuation ratios (LVR), lending on interest-only terms to owner-occupiers, and lending for very long terms. It asked lenders to put greater emphasis on whether borrowers could service their loans, especially if interest rates were to rise. Alongside this, the Australian Securities and Investments Commission (ASIC) reviewed interest-only loans, which led to a number of lenders having to tighten their requirements to pay more attention to borrowers’ living…

Most people don’t like to talk about it. But it is one of the biggest financial dilemmas facing the generation aged in their 40s to 60s and it is blowing a big hole in their savings and future plans. How do they help set up their children while supporting their ageing parents, who are living longer and struggling financially? It is a tough financial balancing act. Middle-aged people are being squeezed on both sides, which is why they are called the sandwich generation. “The sandwich generation is having it tough. Their best-laid plans are being torn apart,” says Damian Hill, CEO of REST, a superannuation fund that commissioned a survey of the intergenerational pressures facing Australians. Presently some $500 billion is moving up and down the family tree, according to…

As a self-directed investor, Veronica Marshan, 65, follows the sharemarket closely and reads a variety of investment magazines and newsletters. She also manages her husband’s law firm, including its finances and accounts. For the past 25 years she’s been running their self-managed super fund (SMSF), steadily building a diversified share portfolio and enjoying the challenge. “I’ve got a portfolio of about 40 different shares which I’ve bought over the years as well as some managed funds. More recently I’ve invested in an international share fund and companies listed on the ASX that have overseas exposure.” The portfolio also has an allocation to cash. “It means I don’t have to sell shares willy-nilly if I need to fund anything,” says Marshan. While her husband, 74, is still working, they do not…

Sometimes what should be glaringly obvious is not that apparent. Everyone knows that saving through super is tax effective because concessional contributions are taxed at only 15%. But what if the 15% is higher than your personal income tax rate? It’s hardly an incentive, or fair for that matter. From the beginning of July, the low income superannuation tax offset (LISTO) takes effect. Those with an adjusted taxable income of up to $37,000 will receive a refund on the 15% super contributions tax up to a maximum of $500. The tax offset, previously called the low-income super contribution, was set to expire at the end of June 2017 but was extended by the government late last year. In effect, it means low-income workers will pay no contributions tax on their…

What do you think our most popular password is for all those accounts we have online? I guessed incorrectly. I thought we might be marginally original and use our dog's or cat’s name, or our birth date. These are about as secure a wet paper bag. But no, the most popular password for our personal information and key data is 123456. I nearly fell off my chair when I found out. We hear so much about online fraud and the critical role that passwords play in protecting us, yet many people do the equivalent of leaving the keys in the car and the front door open, with a wad of cash in easy view. We all know the problems of myriad passwords. And I do agree that many of the…

Digital investing platform Acorns has released a new sustainable investment option. The Emerald Portfolio is designed to meet environmental, social and corporate governance standards. It invests in two exchange traded funds, Russell’s Australian Responsible ETF and BetaShares’ Global Sustainability Leaders ETF, plus a mix of Australian government bonds and cash. The projected 11-year return with an investment of $30 a month is 42%. Foxtel has revamped its digital streaming offering, Foxtel Go. The service has now rebranded as Foxtel Now, offering subscribers a cheaper $10 entry point and more features. The new service allows viewers to stream in high definition and is compatible with Google’s Chromecast. Real estate agent comparison site OpenAgent has launched a free tool to help property owners estimate their property’s value. OpenEstimates.com.au  allows users to…

APP OF THE MONTH SHOPFULLY COST: FREE OS: iOS, Android If you are keen to become a shop-smarter shopper, look no further than the Shopfully app. It uses a barcode scanner to help you consolidate all of your loyalty cards in one place, allowing you to ditch the plastic and still reap the rewards. Shopfully also uses your postcode to help you discover the best deals in shops and supermarkets in real time. If you’re at the office and are hoping to pick up your groceries on the way home, you can scroll through the latest specials at Coles, Woolworths, Aldi and IGA before you get there. Even better, you can stay up to date when large retailers such as Myer and David Jones have a sale. This means you…

According to iSelect’s database, there are almost 130,000 policy holders over the age of 55 who are currently paying a lifetime health cover loading of at least 50%. Over 10 years, this could add $15,000 to the cost of a policy. 27% the number of iSelect customers aged 31 and over who had a lifetime health cover loading applied to their hospital cover last year. $700 the average extra cost of lifetime health cover loading on health insurance policies per year.…

There are a number of stocks I believe you can collect to benefit from the ageing population. Careful accumulation or dollar-cost averaging should be beneficial over the next decade or so. Challenger (ASX: CGF): It dominates the retail annuity market with an established strong brand and is expanding its distribution channels both domestically and internationally. A little expensive. Be patient. CSL (CSL): Global demand for blood and influenza-related products will continue to increase at rates well above GDP growth. CSL is one of three major players in the global blood-plasma-derived biotherapies space with a market share over 30%. Diversification into influenza-related vaccines provides another earnings stream in a growth category. A financially robust company with strong management. Greencross (GXL): Perhaps an outlier, Greencross is the leading integrated pet care company…

Fact file Cedar Anderson Inventor of the honey-harvesting Flow Hive Raised on a commune near Lismore, in northern NSW. Encouraged at a young age to tinker with contraptions. First job was picking blueberries for $7 a bucket. An environmental activist who supports groups such as Greenpeace, Oxfam and Rainforest Trust. One of the most celebrated start-up gurus of recent times wasn’t nurtured in a tech hub and had no financial support from high-flying investors. In fact, Cedar Anderson says he grew up in the belief that money was the root of all evil. His primary drive is to do good in the world. That seemingly paradoxical situation grounded him while he took the invention that has revolutionised the production of honey from his workbench to global success. It still does.…

LINDZI CAPUTO Lindzi is a financial planner with HLB Mann Judd in Sydney, specialising in superannuation and personal wealth management. Bill and Lynn receive combined government pensions of $21,840 a year. They want an annual retirement income of $52,000, meaning Bill’s part-time work needs to contribute $30,160. If Bill stops working it is likely that they would receive a combined annual pension of $34,000. They would then require $18,000 a year from their capital (representing an annual drawdown of 6%). However, a conservative portfolio is unlikely to achieve this level of return, so Bill and Lynn may need to reduce their expectations. If they wish to preserve the capital, they would need an annual investment return of 7%-8% to also cover inflation. This means having a diversified portfolio with some…

I’m 27 years old and work full time, earning $83,000 (gross) and salary sacrificing 5.5% into my super. I have $64,000 in super, $22,000 in a personal savings account and $3000 in a joint account. Not yet being a homeowner, I am enticed by the idea of investing through a long-term plan. Do I continue to salary sacrifice into super, or use this additional money to a) invest or b) continue to save for a 20% house deposit? I have heard of exchange traded funds but am wondering how best to start a share portfolio. Justine First up, Justine, it is really impressive that at 27 you are earning a really good salary and you clearly have a plan to save. This can be seen in your super fund of…

How can you pay 1% less on your mortgage while your parents earn 1% more on their savings? Get your parents to put their spare cash in your offset account. It’s something that Money’s chief commentator, Paul Clitheroe, has been doing for some time. In our October 2016 issue he revealed this: “Our two working kids have a pretty chunky mortgage. Now in our early 60s, Vicki and I have a proportion of our portfolio in solid and safe cash. Things like term deposits. These are paying about 2.5%. Our kids’ mortgages are about 4.5%. So it makes sense for us and most others in our situation to get a loan document drawn up and put our money into the kids' mortgage offset account. They pay us halfway between the…

Small business is a cornerstone of the economy, a fact supported by Australian Bureau of Statistics figures released in February showing that the entry rate of new businesses into the market has never been higher. As of June 30, 2016, the number of actively trading businesses in the market sector was about 2.2 million, an increase of 2.4% from June 30, 2015. Despite the important role small business plays, the struggle to secure finance – often needed to expand and grow – from traditional lenders, including the big banks, continues. There is an estimated $60 billion of unmet lending demand from small and medium-sized businesses in Australia, according to a recent industry report. What the lenders want Traditional lenders require security, a business plan and a 12-month profit and loss…

Do you have what it takes to be a successful entrepreneur? It’s that age-old question we ask ourselves and others whenever we’re faced with a challenging endeavour. Do you have what it takes? Well, when it comes to entrepreneurship, having "what it takes" is a whole new ballgame. The tenacity, leadership and courage required to run a successful business can stop some people in their tracks before they’ve even begun. Some might say that being business-savvy is something that you’re "born with" while others suggest your surroundings and environment play a much bigger part. In my time as a media presenter I’ve interviewed many business owners from varying backgrounds and walks of life but I can’t say there’s always been a common thread between each. Some people go into business…

You may well have the option to have both dwellings sit on top of one another and share some common facilities, such as a driveway, an area for parking, a pool or a laundry. In this scenario, each dwelling would be separately titled, and there would also be a new title for the common property that you and your new neighbours would share. You and the owner of the second lot would then become members of an owner’s corporation. Anthea Digiaris, an associate accredited specialist in property law at Slater and Gordon, says that although you might be interested in going the strata route, it will ultimately depend on your zoning restrictions and whether it will be appropriate in your area. “You need to get planning advice from a town…

As an only child, Jon Blake has been a caregiver, helping out his mother, Elspeth, in various ways since he was a teenager. Elspeth, following infantile meningitis and encephalitis, was unable to ever work. She struggled financially and so, following her divorce, it fell to 19-year-old Jon to help as she couldn’t afford rent, let alone to get a mortgage. “My mum couldn’t get a home loan and so I went into a mortgage with her so that she could have a place she was happy in,” says Jon. Now in his mid-40s, Jon has his own family with three daughters, aged 16, 13 and 10, to support. He is a generous and compassionate man who continues to support Elspeth, but he is feeling the typical pressure of the sandwich…

“The evidence I can see is that a well-diversified portfolio that has relatively low fees, that has relatively low turnover so it reduces taxation and transaction fees, is likely to give you the most predictable and reasonable return in the long term. “If the portfolio has taken into account your risk profile, there is little likelihood you will need to change it over your lifetime. Because there is no evidence that says trying to pick the highs and lows of the market adds value. “Looking at the data, you don’t want to be overly exposed to equities because you have nowhere to rebalance. Whereas if you have a position where you don’t go beyond 75/25, you have a rebalancing capability that is automatic. Equities have boomed, let’s take some profit.…

It might be a bit too early to call, but I think superannuation is finally starting to look sexy. Those of us that can’t afford to buy a house are thinking we’re probably going to rent for the rest of our lives, so when we are 80 years old and still paying the landlord every week, it would be reassuring to know that our super will keep us fairly comfortable (and maybe even get us to Bali once a year). The problem is that the new highly attractive superannuation products marketed to millennials might not be the best thing for us right now. There are two big things that millennials are concerned about: social responsibility and control. This has given birth to a range of millennial-targeted super products. Some set…

From around May to September/ October, I normally feel a bit nervous about the risk of a pullback in shares. The old saying “sell in May and go away and come back on St Leger Day” is really stuck in my mind. Most major sharemarket falls have occurred in this period, including those of 1929 and 1987 and during the worst of the GFC. What’s more, shares have had good gains from “bear market” lows in February last year and as usual there is no shortage of calls for the next crash. However, while it’s been a case of so far so good for global shares, which have been underpinned by good economic and profit news, we appear to be going through another bout of uncertainty regarding the Australian economy.…

Just over a year ago, here at Money we reviewed the banking sector and suggested Westpac and Commonwealth were our preferred holdings. From a low of $70.87 Commonwealth Bank touched a high of $87.40 and paid $4.21 in dividends since our column and a valuation of $74.73 to $84.10 a share was published. And from its low of $28.27, Westpac rose to a high of $35.06 and paid $1.88 in dividends. Since those highs, which exceeded our valuations, bank shares have been sold down heavily in response to a number of factors, some of which we alluded to in last year’s column. Share prices returned a loss of 9.8% in May alone and were the largest contributor to the market index’s weakness. And despite lower prices, bank share prices still…

Unhealthy obsession with real estate As a recently arrived migrant (three years now) and a qualified accountant, I am perplexed to see the Australian obsession with real estate (notwithstanding the irony that despite being a continent with so much land, there exists a housing crisis), and virtually no discussion on equity/managed funds on prime-time television or from the government. Time and again, it has been proven that the best asset class over a long period is equities. The Buffetts and Vanguards of the world became rich investing in businesses. Even in developing countries such as India, the government encourages investment through mutual funds that yield high double-digit returns. These investments in managed funds (equity linked) with a lock-in period of three years lower tax liability in the year of investment,…

For the past decade, Australian electricity consumers have endured continuous price increases, and this year hasn’t been any different with rises between 7% and 20%, depending on which state you’re in, resulting in obvious negative impacts on family budgets and business competitiveness. These July energy price hikes have come off the back of the closure of the Hazelwood power station in Victoria in March, combined with a tripling of wholesale gas prices over the past three years. A perfect storm really, which has resulted in baseload wholesale electricity prices in effect doubling in NSW, Victoria and Queensland since this time last year – a crisis that could have been avoided with better planning and governance. For instance, establishing a domestic gas reserve, which would electricity generated, which is an achievable…

An enduring power of attorney (EPOA) is something we should all consider, but knowing when to make one is equally as important. It is therefore essential to consider the timing. Your attorney’s power continues after you have lost the mental capacity to make decisions about your financial affairs. The EPOA will need to be explained to you by a “prescribed witness”, such as a solicitor or even, if you’re overseas, a legal practitioner qualified in a country other than Australia. Accordingly, a valid EPOA should be done before you are ever at risk of being deemed not to have capacity to deal with your finances. It is recommended that an EPOA is made as part of your broader estate planning and probably years before you ever intend it to take…

Over the next few months millions of Australians will be rushing to lodge their tax returns in the hope of a generous refund cheque. Whether you intend to use a tax agent or to lodge yourself through the myTax system, here are a couple of key tips to bear in mind: • Take extra care that your return is right if you intend to lodge early. Many people lodge their return during the first weeks of July to get a refund as soon as possible. By doing that, though, you expose yourself to a real danger of missing crucial information. These days, the ATO receives a wide range of information from third parties such as employers, banks and private health providers, which can be pre-filled on your tax return. However,…

Spurred by the Australian Prudential Regulation Authority (APRA), the big banks and their subsidiaries are tightening their lending criteria for borrowers. Commonwealth Bank has introduced new tests for assessing loan serviceability, including a 30% service loading for new customers with existing loans from other lenders. For existing CBA customers, there will be an interest rate buffer of 7.25%, or the current product’s interest rate plus 2.25% minus any existing rate concessions, whichever is higher. CBA also recently changed its interest-only loan criteria, with higher rates, lower discounts and bigger deposits. Bankwest, a CBA subsidiary, has lifted its interest rates by 0.75% for borrowers with loan-to-value ratios (LVR) – including lenders mortgage insurance – greater than 95%. Macquarie is also tightening its eligibility criteria, with reports suggesting that the bank has…

Bitcoin is – again – the word on everyone’s lips. After hitting record prices in 2013, things went quiet. But you can’t keep a good speculative bubble down – until it pops, that is. Bitcoin promises the best of two different worlds: anonymity but also complete security. Its underpinnings are a bit of techno-jargon called blockchain. In short, the “ledger” of who owns what doesn’t sit at a central bank – or any bank at all. Instead, the records are kept simultaneously across many computers that all check in with each other. And the owners are known only by a string of unique text; the system doesn’t keep a record of who is who. Buying and selling bitcoin is simple enough: you find a marketplace (online, naturally) and swap your…

Fund managers who donate their investment time to the philanthropic company Future Generation presented these top Australian share picks at a recent FG forum. Geoff Wilson, Wilson Asset Management: Afterpay (ASX: AFY). Ben Griffiths, Eley Griffiths Group: Noni B (NBL), PWR Holdings (PWH). Sean Fenton, Tribeca Investment Partners: Telstra (TLS). Gabriel Radzyminski, Sandon Capital: Iluka Resources (ILU), Mineral Deposits (MDL). David Prescott, Lanyon Asset Management: PMP (PMP).…

Helen’s top priority is to ... Protect the $250K inheritance Q I am 22 and at university studying dentistry, and will graduate in three years. I am confident about getting a secure job with a good income (the average for Aussie graduate dentists is around $90,000 a year, I was told) when I graduate. I am living off my income of $400 a fortnight, plus Centrelink youth allowance payments of $300 a fortnight. I cannot earn more than this as I do 42 hours a week of face-to-face lessons plus studying on top. I have just been told I will receive a $250,000-$300,000 inheritance in the next couple of months and I don’t know what to do with it! As I am young I have no responsibilities as such and…

At some point in the last decade, the smartphone eclipsed the PC as the ubiquitous, must-have digital device. Where once people read books and newspapers on buses and trains, we now sit glued to our tiny (and not so tiny, these days) smartphone displays, and with good reason too. Our phones are the most convenient and portable computing gadget, making even today's svelte laptops and tablets seem somewhat cumbersome by comparison. They're our instant connection to Facebook and Instagram. They're our cameras, our gaming fixes, our shortcuts to YouTube and Google. They’re also used to make phone calls on occasion. But such is the nature of the tech media – which loves to coo over the latest slick, top-of-the-line flagships – you could be forgiven for thinking the only phones…

Even on a lower income, topping up super and choosing the right asset allocation can make a difference to your future lifestyle ‘‘Bad’ debt could end up costing you thousands of dollars in the long run’ $40k a year If you’re earning $40,000 there are a few things you could do to make the most of your money. If you are part of a couple and your partner is earning quite a bit more than you, consider in whose name the investments should be held. When they are held in the lower-earning partner’s name the income (interest, rent or dividends) could be taxed at a lower marginal rate. For example, someone with an income (after deductions) of $40,000pa is likely to be on a marginal tax rate of…

As Orwellian as it may appear, the Australian Tax Office has the means to detect when you appear to be living well beyond your means. Those found to have undisclosed income could end up being fined and, in worst-case scenarios, jailed. The ability of the ATO and other government agencies, together with private companies, to “overlay and analyse” data from any number of sources is far from new. After all, this is what the financial intelligence agency AUSTRAC was set up to do in 1989. Since then, however, AUSTRAC’s ability to electronically track and match various sources of public data (ATO, Centrelink, child support, Medicare, and the Department of Immigration) with private data – such as motor registries, private credit agencies, banks, your employer and even online marketplaces – has…

Name: Ryan State: NSW When Sydney man Ryan became fed up with high energy bills that gave little insight into consumption and cost, he went looking for a better option. “I had begun looking at some of our financial products and larger household expenses to make sure that the providers we were using were giving us the best value for money,” he says. Ryan lives in Sydney’s inner west with his wife and two-year-old twins, and the family was spending about $3000 a year ($250 per month) on power. “I didn’t like that our original provider was essentially a ‘black box’ sending us a quarterly bill with no real insight into what the cost drivers were and showing no initiative to help us get the better value I was seeking.”…

YES SALLY MCMANUS Australian Council of Trade Unions The $22 per week increase in the minimum wage represents less than half of the $45 argued for in the ACTU’s claim. The $45 per week increase was the amount that we calculated was necessary to rebuild the minimum wage to the levels which used to underpin the guarantee that full-time work meant a wage you could live on. The Fair Work Commission in its ruling stated that the $22 per week increase would not lift all workers out of poverty. The fact that anyone in Australia is both in work and in poverty is entirely unacceptable. Corporate profits rose almost 40% on a yearly basis to March but wages are growing at 1.9% and aren’t keeping pace with inflation. Australia needs…

Many young adults, finding it increasingly difficult to embrace the great Australian dream of home ownership, are staying put in the family home. Almost two-thirds of those living at home (62%) can’t afford to move out, while 21% of those aged 18 or over and living in the family home expect to remain with their parents until they are at least 30, according to CoreLogic’s Perception of Housing Affordability survey. The vast majority of non-homeowners (89%) believe it’s important to own a property but 87% are concerned they can’t afford to do so, according to the survey. With many young first-home buyers priced out of major city markets, especially Sydney and Melbourne, helping their kids is high on the agenda of many parents. Many have given up expecting much help…

Here’s the truth about investment. You don’t get everything right. Far from it. You don’t control the process. The fact is, most of the time you feel as if there’s little control at all. You will lose money. Simple as that. If you want guarantees, keep your money in the bank. At least the government will guarantee you $250,000 per deposit. But in the long term, after tax, your money is probably losing value to inflation anyway. Now money in the bank is not always such a bad thing. Especially if you’ve taken the attitude that there’s nothing to buy. No value. The real answer is to look harder or to look longer term. It is only a genuine pessimist, or panic merchant, who cashes in everything and claims the…

You all know what a PE ratio is: it is the price of a share divided by the earnings per share in a particular year. So if a company share price is $1 and it is earning 10¢ per share this year, it is on a PE ratio of 10. But there are a variety of problems with PE ratios and on its own a PE really doesn’t tell you very much. It appears to allow you to compare how cheap or expensive companies are relative to each other but it has a major flaw. It doesn’t take account of earnings growth. It’s no good, for instance, saying a company that is on a PE ratio of 20 is expensive and another on a PE ratio of 10 is cheap,…

What was your first job? I grew up in Sydney’s western suburbs in a family that struggled financially after my parents divorced. I was removed from school at the start of year 11 to work in a retail shop my mother bought that wasn’t making money. I managed the shop solo while my mother found other work that paid the bills. I was just 17, and there were many invaluable life lessons I learnt in those two years before I branched out on my own. What’s the best money advice you’ve ever received? A penny saved is a penny earned. I see that all the time in the renovating game. People fritter away money on improvements or materials that aren’t necessary and do little to lift the value of their…