Have you considered Enamel?

This was the question we were subtly asked when at the paint shop. No ‘we hate enamel’ as too hard to work worth when doing our own DYI. However he was right as the finish isn’t quite there & hence we need to revisit the paint job to finish the presentation. I.e. DYI is good but not necessarily Efficient.  You don’t win the Cup that way.

We admit to other similar DYIs in last week. E.g. first mixing the sugar with the flour & not the canola oil first when baking the carrot cake.  It turned out delicious according to the neighbours but it is those simple missteps that can lead us astray. There was a doubt until the tester came out clean. Not Efficient & you don’t win the Cup that way.

 We spoke to Warren on Friday who has some cover on his industry fund which in no way will cover his proposed 472K DEBT. If he does worse than Molly on the 24^th Floor then he has made his mum a dependant. Mum is not a financial dependant & hence may get taxed @ 30% ~ 55,000 on the 272K life pay out. That is no good to Ellen who would be a joint owner in the proposed house debt. Does Ellen sell as she can’t afford the Debt or does she chase up his mum? Either option is very Dear & certainly not Efficient. Recall that workers compensation doesn’t cover illness or outside work.

However this wasn’t the main problem for Warren & Ellen. It was the very small < 10% deposit on a house. That is OK if all goes well & we certainly didn’t want to be ‘dream stealers’. However it meant paying to the bank a multiple say 3-6 times 472K or say 1.4m+ to the bank. That is a very expensive landlord & interestingly the Big banks stated they did NOT want more than 10k p.a. extra into Debt repayments. Who is that good for? As we stated 2 years ago this week ‘Daughters tell fibs But the big Boys tell lies’. The 12K into mortgage insurance is good for the bank & may as well be torn up by Warren. It's dear & certainly not Efficient.

 Also the mortgage insurers Gensworth aren’t making any profits in the last quarter & withdrew their IPO. What does that mean?

If that is the situation for the first home buyer then a similar inefficient story occurs for the baby boomer. Is that large house not too large as we saw on Saturday evening at a bar-b-que?

5 bed rooms & 3 bathrooms for usually 1 couple & one teen ager. How many are like that & hence too many are working hard to pay off too much DEBT. Of course the house is ‘risk proof’ so they say but in any negotiated sale then it is easy to drop perceived prices by 10% to 15% & that doesn’t take much to be 100K. SHA recently suggested that selling rural acreage can take up to 3 years. That’s a long time to discharge the bank landlord. Also on every SHA there is thousands of difference between vendors & buyers concept of price. That isn’t Efficient & doesn’t win the Cup.

 Archie, a small stake holder in Efficient, is at Ascot UK next month as he doesn’t own a big house. That extra capital which could be locked in a house can earn an income for those UK trips that those of any vintage would rather do.

That is what our PCMS* does. I.e. it is an Efficient solution to have the taxx man subsidise the debt & allow those European canal trips which Sheila with her 2 daughters is on now to enjoy earlier than others. It allows a portfolio outside those ever-changing super rules.

We note two of many changes from the Swansong budget that Sheila from next year will only be able to have 6 weeks overseas rather than 13 weeks before Centrelink reduces her part pension. She will also be means tested on her medical expenses over 5000 rather than 2000 & at 10% rather than 20%.

Wayne’s swansong will also require some guidance & due to the law of unintended consequences there will be efficient ways to play the game. We have here 13+ ways to maximise the moment & minimise Taxx before June 30^th.

You have the options of maximising & being efficient or DYI which is generally not efficient & hence dearer. As recent European events have shown it is up to you & being efficient is an Essential.

As we discussed with Warren & Ellen today you have to be more efficient with your money. E.g. Perhaps the opportunity to deposit today an extra 10K in the Debt or work an extra year or do. Which do you prefer? Which is most efficient & DYI can be costly.

At our age which we are again reminded this Friday that is a given.

You are welcome to call on 07 3848 1088 or email or visit our websites to meet & maximise your financial position. Although we are not as intimidating as the elite athletics’ coach we listed to last week then if you are cynical  we ‘break bread’ first as trust is the first step.

John McAuliffe