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Money Magazine|June 2024From little things, big things growEDITOR’S WELCOMEEDITOR’S NOTE Tax. It’s probably not a subject that grabs you, but it is a subject that – if you’re across it -can enrich you. This is particularly true given that from July, most of us will have the stage three tax cuts edging up our pay. In this issue, we offer ways to ensure those extra dollars don’t get lost in your day-to-day spending but are wisely invested and grown. Ever practical, we also turn our expertise to this month’s big money move, preparing your tax return. Our cover story (page 34) is replete with the best preparations, strategies, deductions and deferments so you can maximise what you get back. Because every cent counts. And when it comes to spending, we have delved into ways to get what…1 min
Money Magazine|June 2024Are we working enough?IVAN COLHOUN OUTLOOK Productivity is a topic where there appears to be considerably more talk than meaningful action. Australia’s performance has been very much in the news, with former and current Productivity Commission chairs advocating the Federal government adopts a more pro-productivity, pro-competition agenda, while at the same time sounding a note of caution about potential negative impacts on productivity from the government’s Future Made in Australia Act. Let’s take a closer look at what’s happening. Productivity is important because it’s within our control and enables us to lift incomes and living standards. The simplest – and most frequently quoted -measure of productivity in Australia is GDP per hour worked, which measures aggregate (real) output per labour input. The chart shows the trend in GDP per hour worked over the…4 min
Money Magazine|June 2024Don't click, even if it's KochieHave you seen an ad on Facebook, X or Instagram where a celebrity is raving about a get-rich-quick scheme or has been caught in a police sting? Recent examples involve Kochie being dragged away by the po-po with a caption claiming ‘David Koch didn’t know the camera was still recording… is this the end of his career?’; a frazzled entertainment reporter Richard Wilkins mid-arrest because he accidentally revealed some truth on morning television; and mining magnate Andrew Forrest enthusiastically endorsing cryptocurrency during an interview. But click on the link and you’ll be taken into a black hole of lies. You’ll be asked for your details, then you’ll be told about an investment opportunity and almost inevitably be directed to a convincing-looking website where you may end up handing over your…1 min
Money Magazine|June 2024MY MONEYMORE MONEY STORIES ON P44-56 Aussies pocket $672 a year by clicking cancel Households may be saturated with choice when it comes to streaming services, but many are giving their unwanted subscriptions the flick. According to NAB’s latest consumer sentiment survey, more than one in three people (37%) have reduced their streaming costs over the past three months – a 12% rise on the same period last year. The bank found that those who do manage to cut back save $56 a month, or $672 annually, on average. “Australians might be surprised to find out just how many subscriptions they’ve signed up to without even realising,” says Larna Manson, a retail customer executive at NAB. “Decluttering expert Marie Kondo put it best when she asked, ‘Does it spark joy?’ You…1 min
Money Magazine|June 2024House prices tell a tale of two citiesNational home values have recorded month-after-month growth since the market bottomed at the beginning of 2023, but there is a substantial divergence between markets. Research by CoreLogic, which looked at the performance of house prices in the two years before and after the Reserve Bank started lifting the interest rate in May 2022, revealed that house values in Perth, for instance, have rocketed by 25.7%. In fact, CoreLogic found that 97.3% of suburbs in Perth currently have record high house values. Nine of the top 10 suburbs for house price growth around the country during the period were also in Western Australia. At the other end of the spectrum, house values in Hobart have fallen by 11.2% in the past two years and values have declined in 98% of suburbs.…1 min
Money Magazine|June 2024SHARESMORE SHARES STORIES ON P80-85 Companies curb their generosity Listed companies spent significantly less money buying back their own shares during 2023, according to the latest research from the asset manager Janus Henderson. Globally, the total amount spent on share buybacks dropped by 14% from $1.95 trillion in 2022 to $1.66 trillion last year. The decline was largely a result of US companies – which account for roughly $7 in every $10 spent on buybacks – having dedicated 17% less money towards buying back shares than the year before. Companies in the Asia-Pacific region, excluding Japan, recorded the largest proportional drop (down 40%), with Janus Henderson noting that this was largely a result of lower buybacks by Australian banks. “Many companies use buybacks as a release valve – a way…1 min
Money Magazine|June 2024Why you need a receipt when buying or sellingHere are some handy hints for both sellers and buyers alike about why a receipt should be part of any transaction when buying a secondhand car, and what you need to know to write one. A receipt is an acknowledgement that a financial transaction has occurred between two parties when transferring ownership or paying a deposit on a vehicle. This is a common practice when purchasing a vehicle through a dealership, but it does not always occur in a private sale. Requesting a receipt for a transaction – whether it is a deposit or full payment on a secondhand vehicle – provides written confirmation for both parties that it has successfully occurred. A receipt will help to ensure that both parties have verification of the transaction; it helps prevent any…2 min
Money Magazine|June 2024GIVE IT UPProject HoPe might sound like a typical charity that provides resources and a sense of hope to people in need, but this one has a different beneficiary in its sights. Set up by Sydney vet Dr Sam Kovac in 2014, HoPe is an acronym formed from the words ‘HOmeless PEts’. Recognising the special bond between rough sleepers and their loyal companions, Project HoPe provides a range of services that enable companion animals to stay with their loved ones through thick and thin. As it says, “the homeless and their four-legged friends share a unique bond, solely depending on one another for companionship and emotional support”. The charity’s raison d’être is to care for the animals that support the humans. As such, it has several pillars: it provides free veterinary care;…1 min
Money Magazine|June 20245 UNUSUAL DEDUCTIONS YOU MAY NOT KNOW ABOUTWho said tax time is boring? Here are five perfectly legitimate, and slightly wacky, deductions. LAUNDERING WORKWEAR If you are required to wear a compulsory uniform or protective clothing at work, you can claim the costs to launder, dryclean or repair the clothing. The ATO says a reasonable basis for working out your laundry claim is $1 per load if it only contains work clothing, or 50 cents per load if you mix personal items with workwear. COVID TESTS You can claim a deduction for the cost of a Covid test if it is used to determine whether you can attend work. A POOCH In very limited circ*mstances, you might be able to claim a deduction for the cost of buying and caring for a dog. Chapman says the two…1 min
Money Magazine|June 2024The five stages of retirementMY MONEY PLANNING Retirement is a very long road. While a lot of focus is placed on the importance of being financially prepared for it, this isn’t the only thing you should be thinking about leading up to, and entering into, retirement. It is helpful to break down retirement into five basic stages. You may not experience all of these, but knowing what they are can help you prepare. Stage 1 Pretirement As you head into your late 50s – or even earlier, if you’re lucky – you should really start to think about when you want to retire and how you are going to go about doing it. Your finances and whether you will have enough to sustain your desired income in retirement is one thing, but you also…4 min
Money Magazine|June 2024Avoid a personal financial crisisMICHELLE BALTAZAR BANKING Everyone’s familiar with the acronym GFC, which stands for the global financial crisis that originated in the US in 2007. While we are not on the brink of another GFC (knock on wood!), history is repeating itself on one particular financial metric: the number of missed mortgage repayments, which has gone up to a concerning level in the past 12 months. In May this year, Westpac said the number of its mortgage customers in hardship had doubled in the year to March. The figures are deceptively tiny – from 0.5% to 1.05% of its home loan customers are in distress. In its half-year results in May, the bank said it had about 18,000 assistance packages on its books for struggling customers. There are problems with credit cards,…3 min
Money Magazine|June 2024Beyond the Bank of Mum and DadIn 2019, Emily Simpson took the plunge and purchased her first property: a three-bedroom unit in a relatively new development on the outskirts of the regional Victorian town of Horsham. Priced out of the Melbourne market, where she lives and works as a property manager at Little Real Estate in Hawthorn, Simpson settled on the idea of an investment property as the right option to help her get a foot on the ladder. “I had some savings that I didn’t know what to do with and my parents had just bought a property in Horsham, so they mentioned that I should have a look around and see what I could do,” she says. “They looked at a couple of properties for me and actually found the one that I ended…9 min
Money Magazine|June 202410 top spots for regional livingPAM WALKLEY REAL ESTATE Moving to the country became a trend sparked by the Covid pandemic when many of us could work from home, so living close to workplaces was no longer necessary. One of the biggest attractions was the affordability of housing in regional areas, and we could get more square metres for our money – not something to be sneezed at when our movements were restricted by lockdowns. In the post-pandemic world, when many bosses are urging us to return to the office, this trend to regional living has slowed, but a recent report, Roaring Regions – Top 10 Affordable Regional Areas 2024, from PRD Real Estate has breathed new life into the idea. We are now officially a $1 million country when it comes to house prices,…5 min
Money Magazine|June 2024Anatomy of a takeoverThe right way: shareholders reap big rewards A takeover doesn’t have to be large to be successful. In 2009, healthcare imaging software company Pro Medicus paid about $5 million for Visage, a North American software business that let radiologists view X-rays and other scans from their mobile devices in seconds, enabling them to make diagnostic decisions remotely. A takeover of that size would barely rate a mention. The technology was a game changer for the radiology profession, which is suffering from a talent shortage, allowing radiology groups to offer flexible working conditions. It proved its worth during the pandemic. Pro Medicus has been inking deals to use the technology with numerous large North American hospital groups and today Visage’s imaging software constitutes the majority of its revenue and is driving…2 min
Money Magazine|June 2024Boost your savings with a 'free' top-upVITA PALESTRANT SUPER Millennials battling high rents, rocketing property prices and mountainous mortgages are unlikely to give their super much thought, with retirement decades away. At the same time, the Federal government’s super co-contribution has generous incentives that are hard to ignore. Sometimes referred to as ‘free money’, the co-contribution helps low- to middleincome earners put more into super. If you don’t have the spare cash to contribute before June 30, you could instead plan ahead, starting on July 1, and use some or all of your 2024-25 tax cuts. Either way, here are simple ideas to make it work. Currently, if you’re on an income of less than $43,445 and make an after-tax super contribution of $1000, the government will give you a super top-up of $500. The amount…4 min
Money Magazine|June 2024When finding love is a lotteryOur lives are increasingly lived online. As a result, the businesses that collect rent from our internet activities are among the most profitable in history. Meta, for example, made $US68 billion ($103 billion) in cumulative earnings before interest, taxation, depreciation and amortisation (EBITDA) over the past decade. You might have thought dating would be similarly profitable. For reasons we’ll explain, it isn’t. Once we met our romantic partners at work, church or school. If not, friends and family helped us make connections. Today, they barely register. Online dating has experienced an astronomical rise over the past 20 years. About 350 million people use dating apps. This alone should make the fingers of any investor twitch. But there is something else. This is a heavily consolidated sector. As with Meta and…5 min
Money Magazine|June 2024DATABANKThe tables on these pages contain data and information to help you compare managed funds, which are pooled funds managed professionally by investment experts. Managed funds displayed in these tables are multi-sector or asset class specific. Multi-sector managed funds invest across a diversified mix of asset types spanning equities, property, bonds, cash, infrastructure, private equity and alternatives. Managed funds are normally set up as unit trusts. You may be able to invest in them directly or through a platform. These products may be recommended to you by a financial adviser. The performance results displayed are the annualised investment returns each managed fund has delivered after taking into account taxes paid by the unit trust and investment fees. Research was prepared by Rainmaker Information. For more information see rainmaker.com.au WHAT THEY…2 min
Money Magazine|June 2024Letter of the monthClever shopping helps cut high living costs As a recently separated mum of three who is struggling to make ends meet, I am always looking for ways to save a dollar, especially at the supermarket. Recently, I came across a copy of Money for the first time in a newsagency. I flicked through the pages trying to decide if I could justify spending $8.95 to purchase a copy on my tight budget. I stopped at your cover story, ‘Game On! You vs Big Business’, and quickly read the case study about the couple Chris and Isha and how they save around $200 a month on groceries with a few clever shopping hacks. This inspired me to examine how I shop and to try their methods. I already felt I was…3 min
Money Magazine|June 2024Withholding tax for foreign residentsMARK CHAPMAN TAX TIP The ATO has provided some additional information for taxpayers regarding the foreign resident capital gains withholding (FRCGW) regime. All non-resident vendors of real property (that is, land and/or buildings) are subject to the regime. This means that when they sell a property in Australia, the purchaser is liable to withhold 12.5% of the purchase price and pay this amount directly to the ATO as, in effect, a downpayment of the CGT liability that ultimately falls on the vendor. The scheme applies to all property sales of $750,000 or more. At a minimum, that means $93,750 being withheld from the sale and paid to the ATO unless there is an approved variation. The most common reasons why a seller may apply for a variation include: selling the…1 min
Money Magazine|June 2024Losses fall, but scammers still rake in $2.7bnThe tide of money being lost to scammers seems to be ebbing, with the latest Targeting Scams report published by the National Anti-Scam Centre revealing a 13% drop in the total amount of money lost, although the numbers are still staggering. During 2023, Australians made 601,803 complaints and reported $2.74 billion in scam-related losses, down from $3.1 billion in 2022. “It is encouraging to see signs that our co-ordinated scam prevention, detection and disruption initiatives can stem the flow of funds to criminals and protect consumers,” says Catriona Lowe, deputy chair of the Australian Competition and Consumer Commission. Investment scams, which often involve fake celebrity endorsem*nts or initial public offerings, were by far the worst, accounting for almost half of all money lost ($1.3 billion). However, that was $200 million…1 min
Money Magazine|June 2024INVESTINGMORE INVESTING STORIES ON P68-79 Index funds trump cash Could idle cash be put to better use by prospective investors? That was the question posed in an analysis by Betashares, which compared the recent performance of deposit accounts and a number of index funds. Between 2020 and 2023, Betashares calculated that Australian savers would have earned roughly $73 billion in interest on the cumulative $1.3 trillion held in deposit accounts over that period. That’s based on a 5.52% return from a rolling 12-month term deposit. Alternatively, if just 10% of those deposits had been allocated to equities instead, the investment could have grown by nearly the same amount, or even more, over the same period. For instance, $130 billion invested into the Betashares Australia 200 ETF would have grown by…1 min
Money Magazine|June 2024HOLD Amazon (NASDAQ: AMZN)Amazon’s cloud business is an investor’s dream. Switching providers is more complicated than heart surgery and leaves customers beautifully stuck. The oligopolistic industry structure grants substantial pricing power, with would-be competitors required to invest billions of dollars. What more could you want? The stock price has risen 62% since we first recommended it in May 2023. But for all the brilliance of Amazon Web Services, the core ecommerce business remains critical to the investment case. However, this is now under threat from an unlikely foe: Temu, the first attempt by its sister platform Pinduoduo – both owned by China’s PDD Holdings – at exporting its wildly successful domestic model abroad. We’re not too concerned. Wired magazine has speculated that Temu loses an average of $US30 ($45) per order and there…1 min
Money Magazine|June 2024Take extra care buying a regional propertyQ I am 60, living with my wife and two infant kids, currently not working. I am mortgage free and have super worth $400,000. I have $40,000 invested in the ASX and use Morningstar research. I have $350,000 in savings – what should I invest in? Should I use the $300,000 equity in my home to buy an investment property in regional NSW, such as Batlow? Well, Mick, I’ve got a great mate who lives in Tumbarumba, so I know the Snowy Valleys area but have never visited Batlow. Tumbarumba is going really well, but I’m going to leave the research on the Batlow property market to you. Pretty obviously, projected population growth, availability of work and access to health services, schools and other important things for modern life, including…2 min
Money Magazine|June 2024Have fun while you can: there's not much point in dying richQ My partner is 63 and no longer works due to injury. I am 62 and work full-time earning $110,000pa, with about $18,000 of my income salary packaged for everyday expenses. We each have $300,000 in superannuation and between us about $500,000 sitting in high-interest savings accounts. Our home is valued at $650,000 and we own it outright and have no debt. I would love to retire but am reluctant to give up a good income. We are very keen to travel and due to my partner’s health issues we don’t want to leave it too late. What would be the best way forward to protect our assets and still enjoy retirement? Hmm. I am scratching my head wondering how to best answer your question. Funnily enough, Vicki and I…2 min
Money Magazine|June 2024My dream of a country-city lifestyle has had a setbackPAUL cl*tHEROE PAUL’S VERDICTYOUR QUESTION I am 39, and 18 months ago moved to regional NSW to be an owner-builder while running my sustainability consultancy (self-employed). I bought two one-acre (0.4 hectare) blocks side by side for $270,000 and $276,000, now valued at $375,000 each. Over the past year and a half, I have spent all my personal savings generated from my business ($220,000) building Mum a house on one block of land. We had a draftsperson design a house for her initially, although a few months later we had the Lismore floods. While we are in an adjacent area that was unaffected, we were unable to find a builder. Up for a challenge, we pivoted to a relocatable Queenslander as an owner-builder project. It required cash to fund this…2 min
Money Magazine|June 2024Savvy saving is the new blackF inding ways to reduce our spending has become a necessity in the face of the high cost of living, especially when it comes to fashion. Fortunately, a growing number of retailers and entrepreneurs are heeding our call to cut costs without sacrificing style. Buying second-hand, extending the life of clothes, renting rather than buying and trading in old clothes for new is turning into a way of life for style-conscious people shopping online. There’s a difference between fashion-conscious and styleconscious, however, and new research reveals more people are aspiring to be the latter. A University of Tasmania study by Dr Louise Grimmer and Professor Martin Grimmer found style-conscious people look for original, highquality pieces aligned with how they want to express themselves, and they actively avoid seasonal trends and…6 min
Money Magazine|June 2024Protect the kids' inheritanceSUSAN HELY FAMILY MONEY In estate planning, there’s one awkward question that older parents with adult children typically ask lawyers when drawing up a will or being the Bank of Mum and Dad: ‘How do we protect our assets in an inheritance?’ When their wealth is passed on, they don’t want their hard-earned assets ending up in a marital pool that can be split if the relationship between their kids and their partners fails. Even if the relationship is rock solid and the parents adore their child’s partner, they may still have concerns that something could happen, says Anna Hacker, a lawyer at Pitcher Partners with 20 years’ experience, specialising in wills and estates. They want the assets to support their own descendants, including adopted children or grandchildren, and not…4 min
Money Magazine|June 2024Fair crack of the whip: how tax can pass the pub testPHIL SLADE MIND GAMES Fair suck of the sauce bottle, fair dinkum, pay your fair share, fair go, fair crack of the whip. Alongside the image of the Australian drover and the passing of the pub test, our sense of national identity is inextricably linked with a core belief in egalitarianism and a ‘level playing field’. Everyone deserves a fair chance in life. So why do we have such trouble agreeing on a tax system that aligns with this ideal? Further, why is tax minimisation seen as ‘sticking it to the man’ and keeping what is rightfully ours? When it comes to tax, is fairness really fair? It seems that while we all want everyone to have a fair go, we don’t seem to be able to agree on what…4 min
Money Magazine|June 2024Protection for vulnerable womenThe Australian Bureau of Statistics’ Personal Safety report paints a painful picture: almost one in six women across the country has experienced economic abuse by a partner, with an estimated 1.6 million having their money and job opportunities either controlled or restricted. This economic abuse occurs when a person is subjected to behaviours or actions that are aimed at preventing or controlling their access to economic resources, thus causing them emotional harm or fear. Here are practical strategies that women in vulnerable situations can follow in the short, medium and long term. IN THE SHORT TERM • Create a budget. This is the first step to take control of your finances and understand where all your money is going. You can use a spreadsheet or app to track your income…3 min
Money Magazine|June 2024KEY QUESTIONS FOR PARENTS TO ANSWERKelly Kennedy, of BDO Australia, has seen early inheritances become more common in recent years as a way for parents to help their kids fund a property purchase. While noting the generosity of the act, she encourages parents to consider a few points before rushing in. 1Can you afford it? “We’ve had clients who have gone guarantor for their eldest child and then wanted to help their second child, but to do that they were talking about selling their family home to bring in some cash. That’s very generous, but they’ve got to assess the impact to their retirement.” 2 How will your pension be affected? “Some clients think about giving their children money so that they might also be able to get some extra age pension. But you really…1 min
Money Magazine|June 2024There's more toASX than sharesWhen ASX was created in 1987 with the merger of Australia’s six State-based exchanges, the ‘S’ in the acronym stood for ‘Stock’ – as in the stock or shares of listed companies. The Australian Stock Exchange was the marketplace where company stocks were bought and sold. But the S needed updating when ASX acquired the Sydney Futures Exchange in 2006. The enlarged exchange required a more encompassing name beyond stocks. S became ‘Securities’ to better reflect the array of financial instruments now available. The Australian Securities Exchange was born. In truth, ASX always offered more than stocks and shares. Does Just Jeans only sell jeans? There’s value in matching your tops to bottoms at the one place. Today the S could stand for smorgasbord, after the Swedish word for a…8 min
Money Magazine|June 2024USE YOUR TAX CUT TO MAKE A 50% RETURNCASE STUDY Felicity, 36, earns $45,000 a year. She has heard about the government topping up her superannuation if she makes a personal after-tax contribution. Given Felicity earns more than the lower threshold of $43,445 in the current tax year, the maximum government co-contribution she can receive is $448 (see table). So, she contributes $896 to get the government top-up – a 50% after-tax return. From July 1, the lower threshold will increase to $45,400, so Felicity has the opportunity to receive $500 from a $1000 contribution. But with cost-of-living pressures and no increase in her wages, she only has the capacity to contribute the extra $804 she will receive from the July 1 tax cuts. This still gives her a 50% after-tax return of $402, thanks to the government’s…1 min
Money Magazine|June 2024Banks aren't bulletproofSCOTT PHILLIPS BEST IN BREED You wouldn’t have to go far to find a share portfolio chock-full of Australian banks. They were, individually and as a group, responsible for incredible wealth creation in the past four decades, as they grew, merged and gobbled up market share. They have, as a result, ended up being lionised for their value creation for shareholders and bestowed with a reputation as quality wealth builders. Until recently. Indeed, over the past half-decade, share price appreciation has either been non-existent or very hard to come by. Compared with late 2007, the ASX Financials sector is dead flat in price terms (excluding dividends, which is notable, given these companies tend to pay out a lot of cash). In part, that’s due to that very reputation – share…3 min
Money Magazine|June 2024'What's your one piece of advice for making tax time easier?'CHRISTOPHER NIESCHE Contributor If you don’t do so already, use a registered tax agent, such as an accountant. Most registered agents have special schedules and can lodge returns for their clients later than the October 31 deadline. This might not make tax time any easier, but it will at least let you put it off for a few months. It’s a particularly useful strategy if you’re likely to owe the ATO some money, although if you’re likely to get a refund you might want to do your return sooner rather than later. Read Christopher’s story on the takeovers game on page 72. NICOLA FIELD Contributor As a freelancer for close to 25 years, my biggest tip for anyone in the gig economy or running their own business is to set…2 min
Money Magazine|June 2024Why a cashless world won't workOH MY MIND CASSIE HAMPSHIRE When it comes to becoming a cashless society, there are so many pros and cons to weigh up. Sure it’s easy to whip out a card or tap and go using a smartphone, or pay bills online, but cash has its merits too. For many children, using cash is when they start learning the basics of maths and understanding the value of money. Cash is also a more effective way to manage a weekly budget than doing it online. When you can see the dollars and cents, you get more of a sense of how much you’re spending than when you’re simply moving sums of money from one online account to another. Hard cash feels more like your money than when it’s a number on…1 min
Money Magazine|June 2024PROPERTYMORE PROPERTY STORIES ON P58-67 Loyal borrowers pay the price Homeowners with mortgages are increasingly sticking with their existing lenders rather than shopping around for better deals on their loans. According to the latest lending data from the Australian Bureau of Statistics, just $16.02 billion worth of loans were refinanced to a new lender by owner-occupiers and investors during March. This is the lowest amount in more than two years and a far cry from the recent peak of $21.49 billion recorded in July last year when interest rate hikes were front of mind. So, what’s behind the lack of movement? Rachel Wastell, personal finance expert at comparison website Mozo, says there are a couple of reasons. “First, the demand for refinancing that was driven by consumers who reached the…1 min
Money Magazine|June 2024Language holds back super balancesThe Federal government is being urged to do more to address the shortfall that Australians from non-English-speaking backgrounds have in their superannuation balances at retirement. An analysis conducted by the Association of Superannuation Funds of Australia (ASFA) found that there was a notable difference between the super balances of English-speaking Australians and the 2.7 million Australians from non-English-speaking backgrounds. “People from non-English-speaking backgrounds make up 16% of total super account holders in Australia and, unfortunately, their super balances are lower across every age group when compared with the general population,” says Mary Delahunty, ASFA’s chief executive. ASFA found that people older than 55, especially women, were most likely to be at a disadvantage. One measure suggested by Delahunty is that the government could increase the low-income super tax offset, which…1 min
Money Magazine|June 2024On a mission for his matesWhen you’re lying on the floor of your parents’ house in blistering pain from a back injury sustained on your last patrol in Afghanistan, things start to look pretty bleak. Combat veteran Angelo Leonardi had just been discharged on medical grounds from the Australian Army after back-to-back tours in East Timor, Iraq and Afghanistan. Along with bulging discs, herniated discs and hairline cracks in his lower back, the 23-year-old was wrestling with adjustment disorder and post-traumatic stress disorder – and had no idea what to do with his life. He’d joined the army at 19. “At the time, I felt really patriotic,” says Leonardi, who is of Sicilian descent. “I love Australia and I loved growing up in Australia – as hard as it is, it’s such an amazing place.”…9 min
Money Magazine|June 2024Will a $95k inheritance affect our pensions?Q My husband is on a disability pension and I’m on a carer’s pension for him. He is going to receive an inheritance from his father’s will of about $95,000. Will we lose our pensions? I’m sorry to hear about your husband’s Dad, Tania. My commiserations to you both. There are two parts in answering your question. As I am sure you know, your pensions are determined by an income test. Let’s say you pop the $95,000 in a term deposit or high-interest account – that would earn about 5%, so some $4750 a year. This is roughly $180 a fortnight and as a couple you can earn $360 a fortnight, so if you have no other income, it will not impact your pension. Mind you, you would not lose…1 min
Money Magazine|June 2024SMART SPENDINGDestination SaunasThree of the best 1. Blue Mountains Sauna, Leura, NSW Blue Mountains Sauna, in the picturesque town of Leura, is run by true aficionados. Based on the Finnish communal tradition, the temperature of the timberlined electric sauna sits at around 90˚C. There are also a cold plunge pool, generous changing rooms and a lovely outdoor place to rest in between sessions. The sauna fits a maximum of 20 people and there are mixed and gender-specific sessions. The owners are knowledgeable about the health benefits of saunas, which are said to include cardiovascular health, joint movement, the reduction of inflammation and better sleep, to name a few. They also sell felt sauna hats that keep your head cool while your body heats up. Each $45 session lasts for two hours, and…2 min
Money Magazine|June 2024SMART SPENDINGOn our radar: three gadgets that make life easier Thin tech What is it? Apple iPad Pro Apple has released its next generation of iPads into the wild, frontlined by the new iPad Pro. Available in silver or black, the latest ultra-lightweight Pro comes in two sizes: 13in (330mm) and 11in (279mm). Apple says the latter is the thinnest device it’s ever made – it’s about as thin as half a deck of cards. Powered by the new M4 chip, the iPad Pro also sports a higher quality tandem OLED screen for clearer videos and photos. It isn’t cheap, so alternatives are the new iPad Air range or the refreshed standard iPad. Cost: From $1699 (11in); $2199 (13in). apple.com/au/store Step up What is it? WalkingPad C2 foldable treadmill Getting in…1 min
Money Magazine|June 2024You're astute with money, so here's how you can make it happenRyan, you have been on quite an adventure over the past couple of years and have faced some quite unique challenges. I can answer your question in one word. Yes. The lifestyle you wish to have is achievable. But I know you would like more information. My editor would also be pretty cranky, as one-word answers are not much good for Money magazine. The reason I am confident you can achieve your goal of a dual country/city lifestyle is based on your age and what you have achieved to date. If you told me you were 68, I would struggle to give the answer you are hoping for. When it comes to success with money, a person’s trajectory with their personal finances and wealth creation is my best guide. First,…4 min
Money Magazine|June 2024Repair and rewear reduces wasteGrowing consumer awareness of fashion’s impact on the planet is well known to retailers, so more are offering to repair items that customers would otherwise throw out – at no cost. This seemingly generous offer is also a savvy marketing strategy. What better way to promote a brand’s focus on sustainability and highquality clothing designed to last? Nudie Jeans, for example, claims its wear-and-tear philosophy is about making jeans you’ll like so much you’ll hand them down to your children. As well, the Swedishborn brand’s jeans are made with organic cotton and its processes are transparent. For those jeans that can’t be repaired (a free service), customers can hand them in for a 20% discount on their next pair. The returned material is reused as patches for repairs or is…2 min
Money Magazine|June 2024Parents don't want to leave behind a messRuling from the grave by putting conditions in the will to restrict access to the inheritance can be problematic. For example, some people want their heirs to adhere to a religion and not stray from it, give up drugs, finish university or get married. “I often talk to people about how you need to balance those restrictions and say, what are the ones that are important? It could be this is for when you finish university. But tertiary education isn’t necessarily for everyone,” says Hacker. One popular condition is age. Hacker says the age to access an inheritance used to be 25 but it is ticking up to 30 these days as adults can take longer to mature financially. They may be able to access some money before 30 but…1 min
Money Magazine|June 2024Another famous fiveANTHONY O’BRIEN SMALL BUSINESS Tax time can be a challenge for small business owners who, unlike their employees, may be less likely to receive a refund. But five strategies can help to shift the tax dial in your favour. 1 Claim an instant write-off on new equipment Good news! The instant asset write-off for small businesses has had a last-minute reprieve. The scheme was due to end on June 30, but it was expected to be extended in the May Federal Budget. The threshold has varied over the years: at one stage it was $150,000 and during the pandemic it was removed altogether. But for the 2024 and 2025 financial years it’s $20,000. Small businesses, with aggregated turnover of less than $10 million, can immediately deduct the full cost of…3 min
Money Magazine|June 2024Useful numbers and websitesAssociation of Superannuation Funds of Australia (ASFA) 1800 812 798 (outside Sydney) 9264 9300 (Sydney) superannuation.asn.au Australian Communications and Media Authority 1300 850 115 acma.gov.au Australian Competition and Consumer Commission 1300 302 502 accc.gov.au Australian Energy Regulator aer.gov.au/consumers/making-a-complaint Australian Financial Complaints Authority 1800 931 678 afca.org.au Australian Securities and Investments Commission (ASIC) 1300 300 630 asic.gov.au Australian Securities Exchange (ASX) 131 279 asx.com.au CPA Australia 1300 737 373 (within Australia) +61 3 9606 9677 (outside Australia) cpaaustralia.com.au Do Not Call Register To reduce telemarketing calls 1300 792 958 donotcall.gov.au/contact-us/contact-details Fair Trading/ Consumer Affairs ACT: 132 281 NSW: 133 220 NT: 1800 019 319 QLD: 137 468 SA: 131 882 TAS: 1300 654 499 VIC: 1300 558 181 WA: 1300 304 054 Financial Counselling Australia National Debt Helpline: 1800 007 007…2 min
Money Magazine|June 2024Here's how investors can get it rightThe ‘buy right’ approach is to carefully choose quality assets – buying right! – then hold them as long as possible. Buying property (or properties) is the single largest financial decision that most Aussies will ever make. Yet most people make up their property plans on the hoof. The buy right approach is to be more conscientious: make a strategic plan and then adjust course along the way as needed to deal with the inevitable challenges. The future is somewhat unpredictable, but it still makes sense to build out a 10-year property plan to get the snowball rolling. Base the plan on realistic assumptions and remember to take into account your personality, values and purpose. Create your buy right plan The first step is to work through these questions: •…7 min
Money Magazine|June 2024The high-stakes gameINVEST TAKEOVERS Corporate mergers make for good television viewing, but in the real world of finance, directors and executives are putting their reputations on the line when they make a takeover bid, as are the leaders of the companies being acquired. Bankers and lawyers have millions of dollars of fees on the line for a successful deal. Shareholders of the target company can receive a quick windfall, but might also lose exposure to potential for further growth in the stock. And in the longer term, a successful takeover can create a bigger, more profitable company or shackle the acquirer with an underperforming and expensive asset that drags on earnings. There were 56 sharemarket ASX company takeovers and mergers worth $US75 billion ($115 billion) in the 2023 financial year, according to…7 min
Money Magazine|June 20243 FUNDS TO WATCHGlobal X Bloomberg Commodity ETF The exchange traded fund, trading on the ASX under the code BCOM, provides exposure to a liquid, well-diversified basket of hard and soft commodities that are significant to the world economy and have low correlation with other major asset classes. It invests in a highly liquid, broad-based basket of commodities, including energy, grains, precious metals, industrial metals, softs and livestock. Perennial Strategic Natural Resources Trust The actively managed fund invests in listed and unlisted companies exposed to the resources industry. It can also invest in global shares (up to 20%) and unlisted shares (up to 20%), with most of the portfolio in Australian listed shares. It has exposure to commodities such as oil, gas, gold, uranium, lithium, rare earths and copper. Betashares Australian Resources Sector…1 min
Money Magazine|June 2024Dump the dogs to cut taxMARCUS PADLEY THIS MONTH If you pay capital gains tax (CGT), on June 30 the tax man will freeze your portfolio, add up all the capital gains and losses you’ve made this year, offset the losses against the gains and come after you for CGT on any net profit. If your accountant hasn’t mentioned it, this is a reminder that you can minimise (defer, really) your CGT liability this year by realising some losses as well as gains before the year end, rather than just holding on. Basically, if you have a net capital gain from stocks sold, or any other capital gain, you should now be looking through your collection of current holdings for any stocks with losses attached that you could sell now to offset any gains made…4 min
Money Magazine|June 2024"Landlords and estate agents know they can get away with murder because they'll find another tenant."Jordan van den Berg The renter advocate recently appeared on Network 10’s The Project, where he urged those locked out of the rental market to take up squatting, much to the ire of property investment professionals. We talk to the man behind the Purplepingers and sh*trentals social channels about his passion for a fairer housing system. Tell us about your background. I’m a unionist, first-generation migrant to Australia and an admitted but non-practising lawyer. I grew up in South Africa and Australia and, ultimately, got very lucky. In doing so, I recognised that not everyone found themselves in such lucky positions and this significantly shaped my worldview. Growing up surrounded by brothers and sisters who worry about where their next meal is coming from when it’s not something your childhood…6 min
