Monthly Archives: November 2018

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‘Absolutely heartbreaking’: how one family’s life changed forever

Jane and Tom Hill* were a young couple with a home, small children and their lives in front of them when a car accident changed everything.
Nanjing Night Net

Mr Hill, the family breadwinner, was a passenger in the accident and suffered catastrophic injuries. He battled chronic pain for a decade before reluctantly leaving his job working for a security door firm.

With five children, the Windsor couple have found themselves in a position they never thought possible, trying to get by on Centrelink payments and charitable donations.

“When Tom was working we were living within our means,” said Mrs Hill, who is his carer.

“We weren’t rich but we were going OK, paying our mortgage and covering all the bills. When Tom was unable to work, that all changed.

“We are very good with our money because we don’t want debt collectors chasing us and we don’t want to lose our home, but there is not enough income to cover the mortgage, the power bills, groceries and medical expenses.

“It’s frightfully embarrassing having five children and having to go to charities for help. It doesn’t look good and it doesn’t feel good.”

Research by the Salvation Army to be released on Wednesday has found a large proportion of low-income earners in the same position as the Hills.

The sixth annual Economic and Social Impact Survey found that skyrocketing housing costs are driving an increasing number of people into poverty, forcing them to choose between rent and putting food on the table or paying bills.

“It’s absolutely heartbreaking,” Salvation Army fundraising and communications director Leigh Cleave said.

The survey of almost 1400 Salvation Army clients, including 638 households with children, found two-thirds were living in extreme housing stress, spending more than half their income on accommodation costs.

Almost 70 per cent of respondents said they could not afford to buy enough food, with two in five saying their budget doesn’t stretch to eating fresh fruit and vegetables every day. One-quarter of respondents said they could not provide three meals a day for their children.

The results found single parents were worst off, left with just $14.35 a day after they paying housing costs. Recipients of welfare benefits were left with $17.14 a day after their accommodation costs were covered.

The report, which comes out ahead of this weekend’s Red Shield Appeal, makes a number of recommendations aimed at alleviating poverty including developing a national plan to address growing inequality, improving employment opportunities for vulnerable people and boosting emergency relief.

Captain Paul Moulds leads the Salvation Army’s Auburn centre where plans are underway to open a market for rescued food donated by supermarkets and wholesalers.

“People are telling us that life is really hard for them,” he said.

“We can’t keep up with the demand. People are coming in, they are not asking for money, they are asking for a bag of groceries to stop them from starving on the streets.”

* Names have been changed.

This story Administrator ready to work first appeared on Nanjing Night Net.

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How much can I save for a home with the new super scheme?

I refer to the new first-home super saver scheme. Are the contributions subject to the cap on concessional contributions that will drop to $25,000 a year from July 1? I have been told that they are counted within the cap, but that does not seem logical.
Nanjing Night Net

Yes, they do count within the concessional cap and I agree that this does not seem logical. After all, the purpose of the caps on contributions is to prevent people building up large sums in the low-tax superannuation environment, while the stated aim of the new scheme is to encourage first-home buyers to save money that can be withdrawn as soon as practicable for a deposit on their home. Furthermore, the total contributions that can be made to the scheme are $30,000 and they are subject to a 15 per cent tax on entry and earnings, while withdrawals are taxed at the individual’s marginal rate with a rebate of 30 percentage points (ie. someone on a 37 per cent marginal rate would pay 7 per cent on withdrawal). Maybe the purpose of making the contributions count for the cap is to reduce eligibility for higher income earners.

Recently you stated that withdrawals from superannuation are not taxable nor are they treated as income for Centrelink purposes. My understanding was that Centrelink does regard lump sum withdrawals from superannuation as income for the purpose of age pensions. I am 66 and on an age pension. I have both an accumulation fund and a transition to retirement fund with Unisuper and wish to withdraw a significant amount from both to pay credit card and mortgage debt but have been reluctant to do so due to anecdotal advice that my pension would be affected.

Capital withdrawals from superannuation are not income for Centrelink purposes. But, the capital withdrawal may affect a person’s income support payments depending on how they use the withdrawn capital. For example, using the capital withdrawal to pay off a credit card would reduce assessable assets and may result in greater pension payments. If the capital withdrawal is from a grandfathered account-based income stream the withdrawal would reduce the deductible amount, as well as the value of the assessable asset.

I am 60 and have not been in paid employment for many years. Over the last 10 years, since all my income is from investments, I have been able to make tax-deductible super contributions to my self-managed super fund. I am wondering, given my long term non-employment status, how I can satisfy a condition of release to access my super without returning to the workforce? Or do I just have to wait until I’m 65?

Once a person has reached 60 they can satisfy a condition of release by resigning from a job, it need not be their main job, or by advising their fund that they have retired permanently. In your case the second option would be the appropriate one.

Much is talked about regarding superannuation as you get older but my question is, should teenagers who work part-time start contributing to a superannuation fund straight away or wait until they have finished university or have their first full-time job?

Given it will be at least 40 years before a teenager can access their superannuation, and many more rule changes are highly likely, it is my recommendation that teenagers invest outside the superannuation system, and focus their attention on developing good money management skills. If they do this, they should accumulate enough wealth in their lifetime that any employer superannuation is a bonus.

I am almost 16 and earn $210 per week on average as a casual retail worker, being paid superannuation as well. Would it be worth salary sacrificing $500 a year into my super?

The problem is that salary sacrificed contributions lose 15 per cent contributions tax, whereas your income loses zero. Therefore, if you wish to contribute to superannuation a better option would be to simply make a $500 non-concessional contribution. This will also make you eligible for a government co-contribution of $250. The result is that you would have $750 working for you instead of $500 less 15 per cent.

My son has left Australia for overseas and has taken up permanent residence abroad. We don’t ever expect to see him back in Australia. He has a superannuation account here from his former working days. Although he is nowhere near retirement age, can he close the account and take his money overseas? Otherwise, it will just sit and waste away in an account here over the years.

The current regulations prevent him taking his money out but there is no need to let it “waste away”. Talk to a good adviser about a superannuation fund that has a good choice of assets, and fits his goals and his risk profile. If he is young it should be growth oriented.

Noel Whittaker is the author of Making Money Made Simple and numerous other books on personal finance. His advice is general in nature and readers should seek their own professional advice before making any financial decisions. Email: [email protected]南京夜网419论坛.

This story Administrator ready to work first appeared on Nanjing Night Net.

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‘What having my laptop stolen in Paris taught me about the housing crisis’

As I write this I’m sitting in a cafe in Paris where I’ve tacked a holiday on to an overseas conference. As you do when it takes more than a day to get over here.
Nanjing Night Net

I haven’t holidayed in Europe for almost five years and I’ve been looking forward to this trip, especially Paris. There’s just something about Paris. The architecture … the art … the food … the robbers.

Yes, the robbers. I was told tales of prolific thievery before coming over but it was not until having my laptop pinched on day one that I really took heed.

I’d almost rather my wallet be stolen than my laptop. For a writer and someone trying to keep in touch with their business while overseas it feels as though I’ve lost an arm. Plus a whole host of documents were on my password protected hard-drive because I’m old school.

An old-school bloody idiot.

Now, if you think I was calm and serene because my laptop was insured, think again. I’d rather have the information on my lost hard-drive than the dollars. This has resulted in much swearing, stomping my feet, gnashing my teeth and a few tears.

Thankfully, most of what was on my laptop is saved to the cloud. I’ve been able to use my husband’s iPad to write this column but as a Microsoft user, that’s been another battle.

My husband has told me that there’s nothing I can do and there’s no use wanting to throw his iPad against the wall. He’s also helpfully suggested I calm down and that I might want to back up in future. Cue more swearing, stomping and gnashing.

But ultimately all the swearing and carrying on isn’t going to change anything. Thankfully my old laptop is insured and many of the documents on my hard-drive that weren’t saved to the cloud were emailed over the past weeks so I at least have a semi-recent version. The only thing I could do was spend a few hours updating a couple of important documents to the most recent version.

You might think this is an article warning about the need to take out insurance from what could have been my own costly exercise but it’s not. Instead it’s about the futility of being stuck being outraged about something you can’t do anything about.

I’ve read with interest the response to articles written about housing affordability again this week and, let’s be honest, they’re the repeat of similar articles and responses written over the last few months. Articles that have prompted outrage from Millennials and other would-be first-home buyers who rail against housing unaffordability and suggest how outrageous it is that they are struggling to purchase their first home.

Here’s the thing. You can be outraged. You can stamp your feet, swear, cry and yell. It feels bloody good to do it. But if that’s all that you do, then you have lost.

There is a time for outrage but unless it propels you to act, then it’s a waste of energy. When my laptop was stolen, you bet I was outraged but then I made a plan to work out what articles I’d lost, what needed to be re-written, what passwords needed to be changed, how I could continue working over here and more. It wasn’t perfect and I’m still annoyed but, unfortunately, that’s life. Or c’est la vie as the French say.

Am I suggesting that not being able to buy your own home is akin to my laptop being stolen? Of course I’m not. I’m simply suggesting that outrage is pointless without action.

Over the past few days I’ve had to be creative and guess what? It wasn’t perfect and it wasn’t the solution I wanted (which was my laptop back, dammit) but it worked. It’s the same for you. Use your creativity to figure out the housing affordability problem as it affects you. Take advantage of the negative gearing rules and purchase a cheaper home or apartment and rent it out, buy shares, start a business, use the new budget rules to salary sacrifice your house deposit to super, consider buying property in a self-managed super fund or trust, think about investing with friends and more.

The housing affordability problem is real for Millennials and anyone else trying to enter the property market. You have every right to be angry and frustrated. But that energy needs to be put to good use if you’re going to solve your problem. So go ahead, be outraged and enjoy stomping your feet, but then go and do something about it.

Melissa Browne is CEO of accounting firm A&TA and financial planning firm The Money Barre and author of Fabulous but Broke.

This story Administrator ready to work first appeared on Nanjing Night Net.

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The 33-year-old with an unconventional investment strategy

What I wouldn’t buy: successful investors share their adviceHow to become a property investorThe five different types of property investors
Nanjing Night Net

An unconventional investment strategy has paid off for Victorian Ashley Thorsen, 33, who recently bought his 10th property.

While most property investors advise purchasing inner-city real estate for quick capital growth, Thorsen focuses solely on buying land in small towns just outside Greater Melbourne.

“What you get rent-wise for properties in Craigieburn is pretty similar to what we get out here, and for half the amount of spend,” he says.

Thorsen’s first property purchase in 2010 was a block of land in his hometown of Broadford (about 80 kilometres north of Melbourne’s CBD) on which he used Metricon to build a four-bedroom house.

“I just bought it as a first house to live in. I didn’t realise that it [the property value] was going to change so much, especially that quickly,” he says.

At the time, first home buyers of newly constructed homes in regional Victoria were eligible for a $36,500 grant.

“The total cost of the new home with land was around the $275,000 mark, minus the grant, which meant the real cost was only $238,500.”

Nine months later, the property was valued at $330,000.

“I decided to list it and sold it on the second day on the market for $335,000 ??? From that day I was $100,000 up and I had a bug for it!”

While land prices in the Broadford area have risen considerably over the past seven years, Thorsen says they remain relatively cheap compared with city real estate.

“Percentage wise the land has probably gone up 60 per cent, but as a price point it’s not much because the land was $76,000 when I first bought it – it’s cheap,” he says.

“By using this method of buying and building in my area I have been able to pay off my own home while only ever paying the interest component on my loan over the past six years.”

Thorsen’s investment property success has also benefited his parents, who were recently forced to hand back their family home of 20 years to the bank.

Using his investment strategy and profit from previous sales, Thorsen purchased a Broadford property off-market in December 2015 for $210,000 with two titles – one vacant block, and one with a house for his parents to live in. Remarkably, the location was directly next door to his parent’s beloved former home.

“I thought I could buy the land and build a new house, and they could pay the repayments on it and it would still be cheaper than what they pay in rent each week.”

The existing house was solid but extremely rundown, so much so that it was considered by most people, including his parents, to be headed for demolishment.

“The agents were just saying it was worth the land only ??? But I just thought it was a solid mudbrick home with double-brick walls, I could completely gut it and start fresh,” Thorsen says.

“We just got trades in and within six weeks we’d completely flipped the whole house around inside – new kitchen, new bathrooms, new flooring and paint.”

On the neighbouring vacant block, Thorsen plans to build two new homes that will pay for the original property plus the renovations on his parent’s home.

Thorsen is currently building his dream home in Kilmore, plus a waterfront holiday house in Yarrawonga. He credits his investment success to time management and buying house and land products over established homes.

“If you buy an established house you’re looking at the stamp duty component on the total price point as well, but if you buy house and land, there’s stamp duty on the land only,” he says.

“For the last seven years, and mainly the last four, I’ve bought land from a real estate agent, and used Simonds as a builder ??? I’d put a house and land together and it would be worth 15, to 20 to 25 per cent more than the total cost as soon as it was finished.”

Previously a car salesman and a Simonds customer, Thorsen has gone on to become a sales consultant for the company.

“After my seventh home with Simonds they actually offered me a job in sales for them so I get to work through everything for myself now,” he says.

This story Administrator ready to work first appeared on Nanjing Night Net.

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How to tell if a property is a renovator or a dump

Five things to avoid when selling your homeThe one big mistake to avoid when renovating or buildingSeven designer paint colours for your home
Nanjing Night Net

We’ve all seen a property ad for a house billed as a “renovator’s delight”, implying all it’ll need is a bit of TLC and will come up a treat. But whether you intend to renovate and sell for profit or renovate to live in, some things will add more value to the property than others.

Before you begin, it’s worth taking the time to consider what you intend to achieve by renovating; these intentions will dictate the type of property you buy. Is it a lick and flick (paint and sell) or do you plan on doing a more intensive reno? If you want to live in it after renovating, will it be your dream home or are you planning on buying and selling every few years, according to your needs?

Being clear about your intentions can make a significant difference to the costing of your project. The last thing you want to do is overcapitalise.

So how do you avoid it? Start by making a smart choice on the property you buy and then work out what to change, discard, replace or leave alone within that property. Some things won’t increase the selling price or value of your home, no matter how expensive they were to do. As a very general tip, making a difference aesthetically is usually going to add more value than making a difference to something you can’t see.

Here are a few things to look out for: Rewiring

While some houses, especially older ones, may benefit from rewiring, it’s going to cost a hefty amount to do. Rewiring is an invisible change and it won’t make the house any more visually appealing or add value if you’re planning to sell or revalue. Restumping

The feasibility and costs associated with restumping make it a poor choice on a limited budget. If they need to be done, they need to be done – but make sure you factor in these costs before buying a home that needs such work. Roofing

Repair, replace or repaint? You need to crunch some numbers on this one before deciding which way to go. Replacing the roof is the most expensive option of course. If you can get away with minor repairs or repainting, it will be healthier for your budget.

Consider the house design, the roof pitch and the position of an onlooker (looking down on the house vs looking up towards the house) before deciding how to treat the roof. If the proportion of roof vs house you see from the road is more than, say 30-40 per cent, then what you do to it will have a huge impact on the overall aesthetic of the house. Windows

The decision here is whether to keep, replace or repaint existing windows. Replacing windows in an average four-bedroom home could cost upwards of $20,000-$30,000 so you would have to be very confident you could recover costs before taking this option. A much simpler choice is to repaint the windows.

If you choose to repaint, use a darker colour on frames that are not in great shape. Light or white colours on old frames will show every shadow and flaw but darker colours are much more forgiving. Driveway

Replacing an old or outdated driveway could cost you upwards of $10,000, so it’s best if you can find a property with an intact one. Fencing

A new fence can be a costly exercise, but it will transform the front of the home like nothing else. For optimal return on your investment, try to choose something that suits your budget and the house. If the styles clash, it’s likely to detract from the overall aesthetic appeal of the property and chances are you won’t recoup your money.

It’s also worth considering whether the style of fence is appropriate to the value of the area. Putting a cheap fence around a house in an affluent suburb, or a house surrounded by high-end designer homes, will make the property stand out for all the wrong reasons. Repurposing rooms

Repurposing a room is an excellent way to add value to a house. For a reasonable cost, you might be able to section off a large laundry to create another powder room or repurpose a study into an extra bedroom.

Whether you intend to live in the house, rent it out, or sell after the renovation, always consider what new room the residents of the house will value the most. Open-plan living

Open-plan living has been very popular for a number of years and shows no sign of waning any time soon. Look for a home where you can demolish a wall to create space so that the rooms flow seamlessly into each other. You will need council approval to do it, but it can be a very cost-effective, smart way of improving the property. Expanding

Do your calculations carefully before committing to expanding on the original footprint of the house or building upwards. While it’s worth considering, you need to ensure you don’t overcapitalise. Floors

Consider what flooring the houses you’re looking at have. New tiles, carpet or timber can be a relatively large expense. Replacing all the flooring in an average four-bedroom home will cost at least $10,000 to $15,000, so if you can keep or reuse some of the existing floors, that’s going to be a bonus. Outdoor spaces

There is so much you can do with outdoor spaces, and often for a reasonable cost. My website has lots of examples of ways to utilise and improve outdoor spaces without doing a complete overhaul. It’s quite achievable to dramatically improve the value of your property by spending as little as $5000 on your outdoor space. Frontage

If you only take one tip on board, make it this one. Wherever you decide to spend your money, the front of your property is where a lot of value and appeal is added. Get the exterior right and you’ve won half the battle.

In this click and flick internet age, it’s far too easy to flick past a property whose exterior is unappealing. It doesn’t matter how great the interior of your house is, you will lose value if the exterior is unappealing. We still judge a book by its cover, and your exterior is the cover of your book. Make sure it tells the story you want it to tell.

Jane Eyles-Bennett is one of Australia’s leading home renovation and interior design experts. She is an award-winning interior designer with more than 25 years’ experience designing the interiors and exteriors of homes; specialising in kitchens, bathrooms and living spaces.

Contact Jane at [email protected]南京夜网 or via her website.This story Administrator ready to work first appeared on Nanjing Night Net.