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

Have you seen The Hunger Games?

Have you seen The Hunger Games?

The Hunger Games is a trilogy which we stumbled across whilst researching what film to attend for a Tuesday night. It was our choice as the Orwellian theme resonated with our other readings of late.

The concept was of Big Brother Government & the political classes having 12 areas of populations annually fight in a gladiatorial contest with one survivor out of 24. The gladiatorial concept might have been extreme but it’s not that different from current cage fighting or the Roman circuses of the past.

 A trilogy suggests the theme globally hits the mark. When we reread George Orwell’s 1984 then how far away are we now from that?

Hence as was on every phone booth ‘be alert & alarmed’ as they want your money.

Thank you Bob Down.

Why? They have promised in every election since Federation that they will look after you & care & defend you. However as Europe is or has discovered that they have run out of money to fund these promises. Only last night on Sky Business we saw an older money trader saying that the pension will have to be deferred until much later as we are all living longer. We explained this week to Dan that for him today it is 67.

It is in fact the unseen liabilities of health, government pensions & today aged care that amount to trillions globally. Hence those taxx sniffer dogs for your money today.

Joe was very right when he commented that the West is stuck in ‘an age of entitlement’. Tony No commented otherwise but the reality is there.

Hence we are caught between saving taxx today or risking it in a super environment where the political classes change the rules during play  as they did in The Hunger Games.

There are loud suggestions that there should be more bonds meaning government bonds in your super. Yeah lets have some Greece or Spain or even Australian bonds in our super.

 I.e. using your money to fund some white elephant or the neighbour’s smoker’s leg amputation.

It is suggested today that the upcoming budget there will reduce superannuation concessions as at present  super is a ‘tax haven’ if you are earning more than the current $37,000.

We also read the taxx man holds $730,000,000 of your lost super. That is better in your account than theirs because they don’t give you any interest & you could have it earning more than zero. It will buy only ½ that in 24 years if government inflation is 3% or ½ in 7 years with real world inflation of 10%.

Hence a time to be proactive & we suggest before the budget which is 8^th May.

There are currently a number of provisions that could be maximised & we can be contacted on www.JohnMcAuliffe.com.au

or email or call  07 3848 1088.  

As Robbie says ‘play what’s in front of you’ & you can only play according to today’s rules.

 However the political classes need to be very aware of the Arab Spring & that the Great Wall of China confiscated so much taxx that eventually the ants opened the gates & let the hordes in.  That is why it is still standing.

We had a local reminder of Big Brother when the Police Minister had to resign as he hadn’t paid a speeding fine. When those arbitrary fines could fed a family for a week then it is usury.

We read that the Land of the Free is intending to legislate that if you have a  ‘'seriously delinquent tax debt’ i.e. greater than $50,000 then under MAP- 21 your passport could be revoked.

Hence minimising taxx today is judicious with the proviso of be alarmed tomorrow.

We suggest a time to be proactive is before the budget which is 8^th May.

There are currently a number of provisions that could be maximised & we can be contacted on www.JohnMcAuliffe.com.au

or email or call  07 3848 1088. 

As Super may have downsides in the future or you have maximised it today then there may be other alternatives that you may prefer to address.

We could give you a list including having the Taxx man subsidise your DEBT.

Will you need to use your super to pay off your DEBT on retirement?  Not if the rules change & there is no access to a  lump sum.

As you are different then personal advice is smart & wise & welcome for lunch here anytime.

John McAuliffe

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