What if Mum needs to go into Aged Care today?

What if Mum needs to go into Aged Care today?

Yes been there & done that. We have had that question ourselves & when it does it needs an answer.  As we said then ‘’we care but we are not carers’

However just as in economics it could be this or it could be that. It depends.

We read in the Weekend Australian 9/04/12  titled ‘Aged fear rip-offs to fund their care’ that the Minister for Aging Mark Butler say s ‘the conversations point to an industry in crisis.’

And again ‘the overwhelming message is that older Australians are not getting the quality of care & support that they deserve from the current system.’

when it was time to enter residential care ‘the price they pay…is based on how much money they have in their pockets rather than a reflection of the true cost of care & value for money’’.

and yes ‘ accommodation bonds paid to get into residential care cost an average of $264,000 but that can be more than a million and are usually raised through forced fire sale of the family home at a time of crisis’.

We had heard elsewhere the average was $365,000 & usually forced fire sale can mean a $50,000 to $100,000 which is only a 10% reduction.

What if it is a sale 15% below estimated by the real estate agent?

 So what is the process & steps that you have to go through & how can you minimise ‘family losses’ & maximise income & taxx benefits?

You need to be ready

o   The Need to enter aged care is often Sudden.

o   A significant bond payment maybe required.

o   There are ways to minimise how much the ‘resident’ pays.

o   Trusts maybe an effective strategy.

o   Planning with good advice is the key.

Decisions need to be made

o   What is the right facility?

o   How much will it cost?

o   How does it all work?

o   What happens to the family home & other assets?

Steps - a family Checklist

·         Get ACAT approval which determines  low, high or respite care.

·         Select home i.e. location, facilities care, culture. Then add name to waiting list.

·         Negotiate the fees & sign the residential agreement. [you won’t know the daily rate until after 28 days in there.]Yep.

·         Do we keep or sell the home? You will need to pay entry fees & review investments.

·         Has estate planning including Power of attorney been actioned?

·         Move Mum’s home into her unit. We still remember that part vividly.

 What is the Cost structure?

o   There is an entry fee payable if assets exceed $40,500.

o   There is an upfront bond or daily charge.

o   There is a basic daily care fee which is currently  15,089 p.a.

o   Then an income tested fee based on private income & government support.

o   At lastly there is an extra service fee which depends on the market & facility.

 What are these accommodation bonds.

·         As above the average is $ 350,000 but if it is $264,000 then that’s not small.

·         The facility uses it for debt reduction, or investing or building say.

·         It can retain 318p.m. for up to 5 years.

·         It is repaid when resident dies or leaves.

·         It is government guaranteed  & paid back within 14 days.

·         It is asset tested exempt.

What do you do when the moment or rather the decision is made?

You can DIY which usually means sell the house & pay what is negotiated. 

·         This often means an extra income from the bank interest earned.  This will have the consequence of increasing the cost of care, the daily care fee, the income tested fee and the extra service fee.

·         It will also reduce the pension.

As ‘it depends’ & everyone is different but you may be able to

·         reduce the income tested fee & the extra service fee.

·         You may be able to increase the pension.

·         Retaining the health card is also important.

You are welcome to call us now on 07 3848 1088 or email us or visit our websites.

Nothing has changed as good preparation means less stress later.

Here to help you negotiate through the aging minefield when you wish.

Yes Dad might need it too although Jack selected a better  & more tranquil place where dolphins pod & cruise ships berth to exit the stage.

John McAuliffe

What does the change of government meant to you?

What does the change of government meant to you?

We might suggest that for many that it means hope. Hope that your personal financial position improves.
  However as Peter a contemporary on Sky Business says ‘Hope is not a strategy’.

Campbell has taken a business approach to his first 100 days. I.e. he has a list of actionable tasks with a timeframe in mind. That is for the new government to achieve in Queensland.

  Barry O’Farrell said on Sky News just today after his first year that in the past in NSW ‘Budgets have been suggestions’.

That must change for all governments & that was one of several messages that the electorate sent to all governments with this recent QLD result.

As in a favourite programme SHA maybe the first call will be to order a fleet of miniskips. Will the result change your financial position today.

  It will but only if you take a can do attitude  can do a similar business approach.

Marion only told us today of her major concern that of leaving the house all paid off to her kids if her hypertension gets her.

When her debt is around ½ million & we suspect bigger then it won’t be paid off before both retire. Hence Marion is keen to have some ‘peace of mind’ life cover.

We have provided her with some simple goals.
  1. Let’s Quit today so that you can afford the cover.
  2. Let’s Quit today so that you can enjoy a trip to Paris where you daughter is enjoying today.
3. Let’s see if you are insurable today & achieve a first step.
4. Lets do a will today.

Now that wasn’t difficult.  we suggest that only by taking a first step is anything achieved.

We also suggested a How to Quit strategy. you can always call us for that.

We read today that BOQ has lost $91million & needs to raise $450 million in new shares.

Wouldn’t it be nice to have some investable funds to buy shares at a discount.

In fact creating a simple portfolio can be structured to help Marion reduce that huge DEBT faster by having the taxx man subsidise it.

That would be a goal which might be achieved within the timeframe before retirement. However it can’t be today & we suspect ever.

There would be a Can do list for this.
1. Let’s do a budget which is not a suggestion & captures those $ that waft into the air.
2. Lets recall that debt reduction which is another message for governments is also a wealth creation strategy as it improves your net position.
3. Let’s review our mortgage as the lowest rate doesn’t mean you pay it down faster.
4. Let’s do our monthly cashflow HW to monitor our performance & enjoy debt reduction. 5. Let’s not raid our mortgage for the short term wants such as a corvette or a ride on mower or a 2nd new car or house renovations, trip to Lapland …. Yep we have heard everything over 17 years.
6. Do you want to use your super to pay off your Debt? Do you want to live on the pension?
7. Let’s have a 3rd & neutral umpire or financial coach to guide you & financially progress with an initial financial strategy. He will have expectations & that is important.

The BOQ might blame commercial debts for its results but there are almost certainly many private borrowers on their debtors list. This no doubt means separations & the pain that that causes in many cases for life.

We have just returned today from a conference with our daughter’s teachers. Amongst the agenda was ours & their expectations. My daughter volunteered on our return journey that she had completed 5 of her week’s goals. Yes she lists & tracks her goals each week.

Can you do & will you do that with your financial position. I.e. list your goals & then keep track. 

It’s a business Can do approach.

Another message for governments & repeated by Barry O’Farrell was that we wanted less & smaller government. We wanted governments out of the way. We want less from them so as we can take more responsibility for ourselves. As the NAB could say ‘Less take & less give away’.

Are you prepared to make a small step forward to your independence.

As always prevention is better than cure & the earlier the better.

Barry O’Farrell also pointed out that NSW Work Cover is 4 billion short.

Would it be wise to be independent of Work Cover? When we read"& Mortgage arrears rise in Q4, expected to worsen as Christmas debts hit’ then let’s explore a different solution.

As another election message was trust then what do you do.

  We suggest why not have a no commitment free lunch with us Monday to Saturday here to help you to make that decision.

We could discuss our subsidised debt reduction PCMS*or our Debt Zapper or ‘peace of mind’ or other financial strategies.

There is a menu there.

A first step is contact us on 07 3848 1088 or email us or book on our websites.

Maybe there is a solution to your financial problem.

John McAuliffe

the opportunity to early access to a development in Greenwich

We are very pleased to be able to offer you the opportunity to early access to a development in Greenwich on the Lower North Shore – just 8 kilometres from the Sydney CBD.

This prestige development consists of a great variety of one bedroom, one bedroom + study and two bedroom apartments all with storage and parking.

There are 130 apartments in total across six boutique residential buildings positioned discreetly in a whisper quiet cul-de-sac.

It is ideally located close to St Leonards railway station, TAFE NSW North Sydney Campus, a short stroll to the Pacific Highway for additional public transportation and just a few hundred metres to the Royal North Shore and Royal North Shore Private Hospitals.

This offers investors excellent value on a price per square meter basis, strong projected rental returns and high level of finishes.

The development is due to commence construction in July 2012 with completion towards the end of 2013/early 2014.

Paramount to the success of any residential development is the makeup development team and we have a team second to none;

• The Developer is the Balmoral Group owned by the Oatley Family who are synonymous with success, style and quality. The Oatley’s have owned and operated Hamilton Island since 2003 reinvigorating the iconic Island over that time. In addition, five years ago they developed and continue to operate Waterbrook a premium resort-style retirement property which is close by. In addition to their development activities the family were former owners of Rosemont Estate wines and now operate Wild Oats Wines and of course supermaxi Wild Oats XI which has taken line honours in the famous Sydney to Hobart Yacht Race on five occasions.

• Architects Marchese Partners are internationally acclaimed and widely recognised for their innovation and excellence. Marchese’s highly qualified team have designed a signature urban development responding to the natural topography and discreet location of the development by creating a series of boutique apartment buildings to capture the intimacy of the natural garden setting.

• Interiors Designers Meli Studio is one of Sydney’s leading interior design firms. Inspired by Scandinavian design elements, Meli Studio has created a fresh, innovative approach. Two interior schemes combine classic, neutral colour palettes and finishes to create tranquil, light and airy living spaces.

Pricing;

1. One bedroom apartments from $500,000 (remember zero stamp-duty for purchases under $600,000)
2. One bedroom + study apartments from $550,000
3. Two bedroom apartments from $755,000

Process;

• The VIP launch will be held on Saturday 17th March 2012. There is available a “Purchasing Procedure” document for a full explanation of the process for the lead-up to launch day and the day itself.
• $5,000 Expression of Interest (fully refundable) deposit will be required.

We can assist you with more detail such as sample floor plans, rental appraisals, outgoings and images of the development.

We can also include some sample cash-flow analyses for your review.

If you think you may be interested in the development please do not hesitate to call us on 07 3848 1088.

Alternatively you can email us info@wealthcoach.net.au


John McAuliffe

Thank you Richard

Thank you Richard for helping us implement the big idea we had after viewing an episode of ‘Selling Houses Australia’.

We are very happy with what we did as it added to our lifestyle & maybe increased the capital value by a multiple of the 2k we spent.

We also were keen to see another episode in Wonderland & where Neville Shute wrote about.

This was a classic reason why the house had to be sold. It was too big & they wanted to unlock some capital to have a lifestyle & downsize now that he was to retire.

The numbers were fascinating.

It had been on the market for nine months @ 985k & hadn’t sold. So the team added their big idea of renovating the house & block for 30K.
This included removing minskips of knick knacks stuff some of which large $ would have been spent.

If only this had been invested over time then there would have been a large capital sum as well there & maybe not the trauma required in house selling.

It was sold at 830K & then there are the sale costs out of it. I.e. ‘lost’ 155K + 30k +21k RE com + SD.

Say 20% loss.

Scary & some early discipline would have reduced the waste.

Would this be you later? The baby boomers are there NOW which suggest house prices will deflate.

Lets remind ourselves that if you want to enjoy a lifestyle later then some discipline is required today.

Remember a 50k income later requires a 1M capital. This is almost twice as important as the house. So a 75K retirement lifestyle income needs 1.5M.

After spending too much time on our block & assisting Richard with implementing our Big idea we are in sympathy with those clients who are downsizing to smaller blocks.

As we discussed with Matt this week unless a family is earning a gross 105K+ then you can’t afford a house.

Simply a family needs 60K+ to live on. It has a mortgage demanding 25K+p.a. to pay. Then the income to earn all that is taxed say 20k.

We also recalled when we didn’t want a 2nd car.

So is a struggle for most who are not in the public service.

This is indicated by the 50B on credit cards. Matt is contributing to that. Do we buy or sell bank shares for that reason?

Hence every one with a mortgage needs a big idea to escape the rat race.

Is there anything bigger than having the taxx man subsidise your mortgage payments over time.

That is what our PCMS* does.

It also builds towards that 1M you need to have some lifestyle.

Will your super provide you with all that?

However it can’t be done online by yourself even though the concept is very simple.

Sorry Kevin.

There are also some parameters that you must have to qualify.

E.g. can you save $10+per day & are you prepared to take some risk as you don’t want to end up as others do.


We have had other events recently.

E.g. Sam falling off a ladder, yep a Molly, & smashing his leg. He is self employed & with no income protection it is now up to his diminutive wife to clean the trucks. Hard to do when 2 young children & mortgage & business debts.

There is an insurance estimator on our sites to help you with the concept & investment.

We also met Ruti from www.bullion1.com.au who reminded us why gold is money.

We added two other big reasons for gold & invested some for the future. We had recently attended a Hunter Hall presentation where they have 5% of their portfolio in gold. They aren’t the only fund manager to do so.

We read that Visa payments have increased by 10% p.a since Visa listed. Inflation is 10% & Not 3% so you need to do better.

We also discussed with Ruti that those who have had a second relationship generally have bigger mortgages & much less time to achieve an escape from the rat race. They especially need the big idea to accelerate their financial progress.

Here we are to provide the big idea that may help you out of the rat race.

Today we read ‘FAMILIES will pay about $150 a year more for health cover from April 1 after the government approved an average 5.06 per cent premium rise’.

Is there a solution for that? Yes 2.

Big ideas generally provide Leverage to you. A little in today & a bigger multiple later.
Is that what you want?

As Julie wrote today ‘Procrastination is the grave in which opportunity is buried’.

Welcome to call on 07 3848 1088 or email info@wealthcoach.net.au or visit our websites & we are willing to help the willing.


John McAuliffe

Selling Houses Australia

Selling Houses Australia

Selling Houses Australia is apparently the most popular program on the Lifestyle Chanel. After spending a wet weekend afternoon watching it we picked up a few ideas ourselves.

We spent the day doing so because we couldn’t spend time outside doing some outside work on the house. There is always maintenance on houses & they require money & makeup of 1% to 2% of house value p.a.

How much per day do you spend on it e.g. water filter, citrus fertilizer, new vanity & labour,…

Of course whilst watching Selling Houses Australia we have ideas on what to do to ‘improve’ our house. It was right in front of us which is usually the case for males.

It appears the average suggested by Selling Houses Australia is 14K. Most don’t have this 14k as cash ready to use.

We observed that the 14k has been spent on stuff in general & hence is unable to unlock out of the house.

What the vendors also don’t have is the big idea to help them sell the house. After all the vendors would have sold their house if they did.

What is the big idea that frequently required.

We would generalize & say a miniskip for the outside & a miniskip for the inside would be a very good start. Make that two for both.

A little cash saving for the rainy day makes sense as Cameron from the NAB suggested.

The next big idea is many want to DYI themselves. They believe they can do it themselves or object to the commissions paid. As Jon once said ‘what part of my services do you want us to leave out’.

Let’s face it if it was easy everyone would be doing it. Rachel is a surgeon earning 250k for 3 days work. Is that excessive? Not if you are the patient.

Remember ‘dentists don’t pull their own teeth.

Martin discovered this week that he is 29.5K better off because of the super plan we put in place in 1994.
Commission & it wasn’t zero was & is not an issue.

Yes we did consider that RE agents could be more proactive in advising the vendors what they need to do to sell the house. We could suggest 10 basics that vendors could follow to help themselves. All common sense but sense is not common.

Another idea is that the vendors may not want to ‘let go’.

Recall ‘if nothing changes then nothing changes’ & it is frequently described as the height of silliness.

Similarly with many on their financial matters.

This is reflected with the scary sum that 50 Billion is owed on credit cards. We understand that 50% of this amount is on the highest interest rates.

Do we buy bank shares or do we sell them?

It is also reflected that the QLD government collects 2.5 million per month on late fees for car registrations.

There is a need for each to do a stock take of what they have & what they owe.

What do they need & what they need to prioritise. It is well understood that to achieve measurable results this needs to be written down as otherwise it is a vague wish.

Paul just asked us today ‘what do you think of income protection for the self employed’.

‘Can you stop work today?’

No.

Then we did suggest a simple solution to keep the income protection cover he has.

Gary did ask for some similar cover himself which with a large mortgage372K & 3 children makes sense. When he further mentioned BMI then it certainly makes sense as the odds are not zero.

We do offer a No 1*other solution if insurance is unattainable as part of our holistic approach.

What Gary also needs to do is get a financial coach to help advise on how pay down his mortgage before he retires. The bank or the broker isn’t going to help him & Gary is running out of time.

He needs to let go but somehow we doubt it & he will need the pension to pay his rent to the bank.

Our PCMS* might work for him if he can save 10+ per day & has the right attitude & self discipline.

Our websites have happy clients who let go.

Lester who is on our panel of preferred mortgage brokers advised us that he had 4 enquires for refinance last week. Three were from separating couples.

We would suggest that many separations are for financial reasons & no doubt a lack of cashflow or overuse of ‘wants’.

When we switched from lifestyle we watched the tennis.

Isn’t it strange all the top players have coaches & have a team helping them achieve their goals.
Remember also that the cricketers have also new coaches.Craig did get 291 test wickets we heard today.

We also wondered how much a super fund was spending on advertising at peak viewing times. Is that information available & where do they get their money?

We certainly wont be doing our own DYI after the Selling big Idea.

You are welcome to call on 07 3848 1088 or email info@wealthcoach.net.au or visit our websites

We are non-aligned & helping where we can for 27 years. As Jim suggested 12 years ago ‘we match energy with energy’


John McAuliffe

A fantastic opportunity for prospective purchasers.

A fantastic opportunity for prospective purchasers.

We have just been advised of some revised pricing for apartments in Lane Cove

In addition the vendor has agreed to pay stamp duty (rebated at settlement) for the next five purchasers of two bedroom apartments if exchanged prior to the end of February 2012.

This represents huge savings for purchasers of between $24,515 to as much as $29,240

Lane Cove is just minutes from Chatswood’s flagship retail hub and only eight kilometres from the Sydney CBD.

This is a small boutique development of just 58 apartments offering a great range of investment or owner-occupier options including; one bedroom, one + study, two bedroom and two bedroom + study apartments.

All apartments offer at least one car space; many two bedroom apartments come with two car spaces on title.

It is another quality project with the key focus on delivering exception properties in Sydney’s most desirable locations, & is certain to be valuable addition to their already impressive portfolio.

The delivery team is rounded out by the very experienced and accomplished Wolski Coppin Architects with designers BHK creating smart and sleek interiors.

The development is due to commence construction in the first quarter of 2012 with completion approximately 18 months later in mid 2013.

Note that Home Builders Bonus will expire on the 30thJune 2012 so the window of opportunity to take advantage of these huge stamp-duty concessions will be over in no time!

If you are interested in the development please do not hesitate to call us on 07 3848 1088.

Alternatively you can email us at info@wealthcoach.net.au

We will be pleased to speak to you and assist you with your enquiries.

John McAuliffe

Fear brings opportunities

‘Fear brings opportunities’ was the title of a recent Share broker’s presentation recently with Peter Q the speaker. PQ is as analytical as any speaker we have heard.

Lets summarise his main points

• The Eurozone is a collection with only 17 countries using the Euro & there is no common financial discipline. This is the current strong need with German leadership direction to resolve.

• Greece is broke [dead] & will be left out & Italy isn’t much better.
• Ireland & Portugal are good & back on track.

• The banks need 300B Euros & not the ‘laughable’ 150B the ECB suggested.
• Hence there will be another 3 months before Europe recapitalises with Europe having a recession for a year.

Is this a good time to travel there?

• The crisis will get worse before it gets better & then the ECB will be forced to help the solvency challenge. Germany doesn’t want to but will cooperate.
• The problem is the politics which is universal.
• Global profits are lower but there is only a 20-25% change of a global recession.
• Hence inflation will be lower & so interest rates will be lower.

• Valuations for equities will appreciate over the next 2 years but there will be another 6+ months of volatility. This follows the Normal pattern after a banking crisis.

• The total value of all government debt is greater that the world’s wealth.
• The ‘developed’ countries can’t grow & it will take 10 years to return to normal growth.
• The so called developing world will grow @5% for next 2-10 years but with a 20+% change of a global recession.

• The Chinese government plans on another 36 million new houses. It is prepared to spend 2% of GNP to boost their position.
• This means Australian resources will be good but other sectors are poor. Australian resources will make up 2/3 of Australian growth.

• There is another 6-9 months of volatility before equities growth of 55%.
•
• Why is it that global stocks have moved 55% up from GFC & Australian only 27%?
i. the strong currency due to the high interest rates & hence overseas investors are selling because of the currency gains.
ii. overseas investors believe & comment that the current government is BAD.
•
The current global PE ratios is 10 vs. a long term average PE of 16.

So what does all this mean?

It means as we suggested to Paul today to head off to France & do some more skiing in France. I.e. forget the headlines & don’t run into trees.

Meantime concentrate on the high income that are available e.g. the banks are yielding ~7% before you take franking credits into account.

It certainly beats banks term deposits. I.e. own the bank rather than lend to the bank.

Now is the opportunity where ‘others fear to tread’ to get set.
I.e. resources for the medium term & the high income earners available now.

As we read today the Euro has dropped below 1.30 to the $US.

I.e. there will be a flight to the ‘Perceived’ safety of the $US. [for the moment]

Gold @1500 & silver @ 29 will be very tempting.

This means the $US will appreciate for sometime & hence commodities which are generally priced in $US will fall. This means more equity downside especially resources stocks.

I.e. beware the Bears.

The Christmas holidays are the opportunity to prioritise & not be distracted by the noise.

I.e. the Central bankers & the politicians affecting your asset values.

The big priority is always to reduce DEBT & TAXX & our PCMS provides a symbiotic structure for you do to both.

As house values have fallen & debts not then it is time for new year resolutions to be acted on.

We wish you all a very Happy Christmas & a happier 2012 & a free Christmas cake when you drop in to pick it up.
John McAuliffe