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Vegemite. The Hills Hoist. Unreasonably expensive property. Franking credits.You may have only heard of three of these four things. However, franking credits are just as Australian as the preceding trio. And if you invest in Australia, you'll want to know about them.In this short, Get Rich Slow Club co-hosts Tash and Ana cover all things franking credits. They also discuss how they impact dividends in Australia, and how they can (positively) shape your investing strategy.@tashinvests@anakresina@getrichslowclub@pearlerhqGet Rich Slow ClubPearlerYouTubeHow To Not Work ForeverDisclaimerAny advice is general and does not consider your financial situation needs, or objectives, so consider whether it's appropriate for you. You should also consider seeking professional advice before making any financial decision.Natasha Etschmann is an Authorised Representative #1299881 of Guideway Financial Services Pty Ltd AFSL#420367. Read the FSG available from https://tashinvests.com/linksPearler is an Authorised Representative #1281540 of Sanlam Private Wealth Pty Ltd AFSL #337927. Read the FSG available from https://pearler.com/financial-services-guideIf you are considering any of the products we spoke about during the show, be sure to read the Product Disclosure Statement & Target Market Determination available from the product issuer's website before deciding. Hosted on Acast. See acast.com/privacy for more information.
In this Australian Retirement Podcast episode, your hosts Drew Meredith, from Wattle Partners, and James O'Reilly, from Northeast Wealth speak about the investments that you should be considering for your retirement portfolio Get retirement advice Ask a question (select the Retirement podcast) Topics covered today: Cash and fixed interest Australian shares and the ‘magic' of franking credits International shares ‘Real' assets including property Alternatives Taking out a mortgage vs renting in your later years Resources for this episode: Drew on LinkedIn James on LinkedIn Drew's bond articles: Franking credits explained Vanguard asset class slide Seven types of alternative investments everyone should know ~~ Resources for the show ~~ Get retirement advice: https://bit.ly/R-plan Ask a question (select the Retirement podcast): https://bit.ly/3QtiY00 Invest with Rask: https://bit.ly/R-invest Access all episodes: https://bit.ly/R-notes Mortgage Broking: https://bit.ly/broke-rask Property Coaching: https://bit.ly/R-P-coach 100-point property checklist (PDF): https://bit.ly/prop-check Accounting: http://bit.ly/3DG5lWS Business Coaching: https://bit.ly/o-coach DISCLAIMER: This podcast contains general financial information only. That means the information does not take into account your objectives, financial situation, or needs. Because of that, you should consider if the information is appropriate to you and your needs, before acting on it. If you're confused about what that means or what your needs are, you should always consult a licensed and trusted financial planner. Unfortunately, we cannot guarantee the accuracy of the information in this podcast, including any financial, taxation, and/or legal information. Remember, past performance is not a reliable indicator of future performance. The Rask Group is NOT a qualified tax accountant, financial (tax) adviser, or financial adviser.
Dan has a gripe today, Tim is learning, rather reluctantly, about raw dogging and the guys are patiently waiting to hear from Practice Ignition for their invitation to a conference in Nashville. In the main topic, the guys talk all things Franking Credits. What is a Franking Credit? What can you use them for? Tune in to find out! AMA coming soon. Get your burning questions answered by emailing twodrunkpodcast@gmail.com
Franking credits are important for many investors, particularly those operating in a low or no-tax environment. A company paying a 5% fully franked yield, for example, gets grossed up to around 7% after franking. Juicy. More than half of the companies listed on the S&P/ASX200 either fully pay or partially pay franked dividends, and it is important to know the relevant franking level. With that in mind, Livewire's Ally Selby recently sat down with Peter Gardner from Plato, and Andrew Fraser from Merlon to discuss five stocks with sustainable and fully franked dividends. For those unfamiliar with franking, they also discuss why franking is important and how it factors into their respective investment processes. Note: This episode was recorded on Wednesday 5 June 2024.
Welcome back to another episode of the 360 Money Matters Podcast! In this episode, we discuss the difference between income and capital growth assets. We explain that capital growth refers to the increase in the value of an asset over time, while income is usually received in the form of dividends or rent. We also mention that these principles apply to other asset classes such as managed funds or shares. Additionally, we emphasize that there is no one-size-fits-all approach and that different investment strategies are appropriate at different times depending on individual goals and life stages. Furthermore, we also discuss franking credits associated with dividend income from shares and how they can be advantageous for investors. We explore the concept of being "asset rich, cash poor," where individuals have significant assets but limited cash flow due to low rental yields or living expenses exceeding income generated by assets. Lastly, we delve into strategies for repositioning assets or investing in capital growth assets to address this issue. Join us in this episode as we continue to explore the dynamic world of investments. Don't miss out on valuable insights and strategies tailored to your financial goals. - This podcast contains information that is general in nature. It does not take into account the objectives, financial situation, or needs of any particular person. You need to consider your financial situation and needs before making any decisions based on this information. This information is provided by Billy Amiridis & Andrew Nicolaou of 360 Financial Strategists Pty Ltd, authorized representatives and credit representatives of AMP Financial Planning – AFSL 232706 Episode Highlights Difference between capital growth and income in asset Understanding different types of asset How to structure investment portfolios Franking credits are and how they can influence investment decisions Importance of timing in investments Balancing capital growth and income Implications of market conditions and retirement on investments Connect with Billy and Andrew! 360 Financial Strategists Check out our latest episode here: Apple Podcast Spotify Google Podcast
Liz and Sarah discuss how 100 days of being on strike has a silver lining — it's given them fresh perspective on a project that was feeling stale. In Take A Hike, Sarah talks about her Do Nothing Day. Sometimes doing nothing is everything. Next, in The Craft (& Fain), they offer tips for coming up with character names. This week's Hollywood Hack will be helpful for anyone worried about no new TV this fall: read a book series. Finally, Liz has a podcast recommendation — Spellcaster: The Fall Of Sam Bankman-Fried. Get in touch on Instagram: @Sfain & @LizCraft Get in touch on Threads: @Sfain & @LizCraft Visit our website: https://happierinhollywood.com Join our Facebook group: https://www.facebook.com/HappierinHollywood/ Happier in Hollywood is part of ‘The Onward Project,' a family of podcasts brought together by Gretchen Rubin—all about how to make your life better. Check out the other Onward Project podcasts—Happier with Gretchen Rubin, Side Hustle School, and Everything Happens with Kate Bowler . If you liked this episode, please subscribe, leave a review, and tell your friends! LINKS: Book Series For Adults: 20 Best Book Series for Adultstckpublishing.com Spellcaster: The Fall Of Sam Bankman-Fried: Spellcaster: The Fall of Sam Bankman-Friedwondery.com Photo by Teodor Drobota on Unsplash To learn more about listener data and our privacy practices visit: https://www.audacyinc.com/privacy-policy Learn more about your ad choices. Visit https://podcastchoices.com/adchoices
Welcome back to another episode of the 360 Money Matters Podcast! When investing in shares, individuals have the opportunity to participate in the potential growth and profitability of the companies they invest in which gives them access to potential capital appreciation of the share price and income through dividends. In this episode, we explore the concept of share ownership and discuss how share prices are influenced by various factors, which investors analyze to anticipate future share price movements. We also cover off on the benefits of what share ownership offers, including wealth creation through capital appreciation and income through the form of dividends. – This podcast contains information that is general in nature. It does not take into account the objectives, financial situation, or needs of any particular person. You need to consider your financial situation and needs before making any decisions based on this information. This information is provided by Billy Amiridis & Andrew Nicolaou of 360 Financial Strategists Pty Ltd, authorized representatives and credit representatives of AMP Financial Planning – AFSL 232706 Episode Highlights Investing in shares Anticipating share price movements Distribution of profits Property analogy Franking credits Capital gain tax Things to consider when investing in shares Dividend reinvestment Connect with Billy and Andrew! 360 Financial Strategists Check out our latest episode here: Apple Podcast Spotify Google Podcast
Marcus talks to legendary fund manager, John Abernethy, Founder and Chairman at Clime Investment Management. They chat about the proposed changes to Franking and Superannuation - John has strong logical views.Disclaimer: This is general advice only and you should consult your financial adviser regarding any of the thoughts, ideas or insights in this podcast.Why not sign up for a free trial? Get access to expert insights and research and become a better investor.
Today we're cracking open the podcast question box to riff on some of the questions you've asked us recently. In this episode, Kate, Owen and financial adviser Drew Meredith cover a whole heap of different topics in a relaxed style, including:
Welcome back to another episode of the 360 Money Matters Podcast! In this episode, we will discuss franking credits - how it works, the tax benefits, as well as its advantages for creating passive income. We highlight the tools used to optimize and maximize opportunities, including the concessional environment and preservation rules. We discuss how passive income associated with a particular stock versus passive income associated with property has different advantages and disadvantages. We also talk about the role of a good management team in deciding what to do with the profits generated from your investments. Most importantly, it is important to have flexibility in your investment strategy to anticipate future needs. – This podcast contains information that is general in nature. It does not take into account the objectives, financial situation, or needs of any particular person. You need to consider your financial situation and needs before making any decisions based on this information. This information is provided by Billy Amiridis & Andrew Nicolaou of 360 Financial Strategists Pty Ltd, authorized representatives and credit representatives of AMP Financial Planning – AFSL 232706 Episode Highlights Passive income from property and shares, including capital growth and dividends About dividends and its relation to Franking credits Franking credits - what they are, how they work, and their tax benefits Diversification of investment markets About assets Passive income associated with a particular stock versus passive income associated with property Flexibility in your investment strategy Connect with Billy and Andrew! 360 Financial Strategists Check out our latest episode here: Apple Podcast Spotify Google Podcast
Fund manager Geoff Wilson has made of Wilson Asset Management says that changes to the franking system by the Federal Labor government will significantly impact companies. The franking credit system was introduced by then-treasurer Paul Keating in 1985 to stop the double taxation of dividends. Franking credits, or imputation credits, are tax credits paid alongside company dividends for imputed tax already paid by an Australian company. See omnystudio.com/listener for privacy information.
Proposed changes to the Australian franking system Q&A webinar by Wilson Asset Management
The largest mass sedition trial in American history churns on. And continues descending into chaos. But the dozens of sedition defendants attempting to wreak havoc on the proceedings would soon get a high-profile assist. From serving members of Congress injecting themselves into the trial and coming to the defense of the accused seditionists standing trial. Before a verdict can be reached, one final twist calls into question whether the Justice Department will see the case to the end, or cut bait entirely.
The walls begin to close in on members of Congress, and members of the America First movement, who are actively involved in a Nazi plot to spread misinformation and propaganda across the country. With a crusading newspaper reporter and a Justice Department prosecutor each peeling back the layers of the scheme, the members of Congress involved in the plot launch a desperate effort to shut down both the reporting and the federal investigation into their activities.
Im Interview: Siegfried Russwurm ist Vorsitzender des Bundesverbands der Deutschen Industrie. Im Interview spricht er über den heutigen Abschlussbericht der Gaskommission, seine Sicht auf den Handel mit China, auf Franking und die Atomkraft. Gabor Steingart analysiert die Tonalität von CDU-Chef Friedrich Merz beim Parteitag der Schwesterpartei CSU. Wie wird die Woche an den Börsen in Frankfurt und New York? Annette Weisbach und Anne Schwedt geben einen Ausblick auf die wichtigsten Wirtschaftsdaten. Der ehemalige US-Präsident Barack Obama schaltet sich wortgewaltig und charmant in den Wahlkampf der Midterm-Elections ein. Grober Fehler in der ARD Tagesschau bei der Verkündung der Lottozahlen.
A paid agent of Hitler's government ramps up a targeted propaganda effort aimed at weakening democracy and supporting the fascist cause in America. His base of operations... the center of American democracy itself -- the United States Congress. Sitting members of Congress, and the America First movement, take part in an elaborate scheme to subvert democracy. Laundering millions of pieces of Nazi propaganda through Congress and into the hands of the American people.
Gerry Harvey, Chairman of Harvey Norman, said any decision to change the law, retrospectively, wasn't acceptable.See omnystudio.com/listener for privacy information.
the burp purge. there is a new voicemail number 484-301-0867 shirt changing. it's hot and it's cold. the hottest thing we have ever eaten. frank goes to clerks 3. break your stupid fingers a rousing game of find the smell. horny frank weed. thank you to the scorpions of support. www.mediocreshow.com voicemail line: 484-301-0867 instagram: mediocreshow subscribe to the scorpions of support to help the show continue. mediocre show PO box 1303 west chester pa 19380
Frank Murphy's friend Jeff Detrow is today's co-host. Jeff says Frank has an “higo problem.” Higo is the Spanish word for fig. Frank and his wife Jere haven't had time to make jam or preserves with all the figs Frank has harvested. They started freezing figs on a cookie sheet to be processed later. Jeff is reminded of the dog meatballs that he prepares for his pets. Frank wants to use the frozen figs to make smoothies. Jeff calls it the new açaí. Frank mentions that figs have a laxative effect. Jeff asks about the transitory time. Jeff learned about transitory time after accidentally swallowing a dental crown. He once lost a crown during a radio interview with a celebrity but found it on the studio floor. Frank appreciates that Jeff has a big vocabulary. Like Frank, Jeff solves the New York Times crossword puzzle daily. Frank recently solved a Monday puzzle in four minutes and 31 seconds. He and Jeff compare solve times for the weekend puzzles. Frank tends to overdo his hobbies and interests, which has been called “Franking it to eleven.” Jeff thinks that Frank's improv experience helps him think quickly while solving the crossword and vice versa. Frank credits improv with helping him in many aspects of life. Come to the Secret City Improv Festival on September 30 and October 1, 2022 at the Historic Grove Theater in Oak Ridge, Tennessee. Use the discount code FRANK at checkout for 25% off when purchasing tickets at https://secretcityimprovfest.com/tickets Frank and his wife Jere went to the Irish Fest on the Hill in mid-August. Frank was the only one in his group who was interested in eating Irish food. They encountered their friend Ida who now lives downtown and could list dozens of restaurant recommendations within walking distance. They walked to the Old City and decided to try a restaurant called Southern Grit, which Jeff has also enjoyed. The host said there would be a 45 minute wait for a table and that the group should go take a walk until they got a text that their table was ready. Frank ordered medium-hot chicken rather than the full Nashville-hot. The waiter said he could bring Frank some emergency milk if necessary. The next day Frank, Jere, and their houseguests went to First Watch for brunch. Frank sensed that a lady at the next table was looking at their food so Frank explained to her what he, Jere, and the others had ordered. Jeff jokes that leftovers should be up for grabs at pizza restaurants. Frank and Jere have driven to Maryville to eat at Jaboni's, which is not far from where Jeff and Kristen live. Frank wanted to support a Facebook friend, Bart Fricks, who bought the Maryville location of Jaboni's from the previous owner. Frank also wanted to support Dan Goss, who left Downtown Grill & Brewery to open Point b in West Knoxville, near Gettysvue Country Club. Frank, Jere, and Artie Rocket ordered the s'mores board for dessert. Jeff recommends making s'mores with marshmallows that have chocolate filling. Point B had a variety of candy bars to make the s'mores. Jeff wonders if Frank can expound on any topic. Frank says there is an improv game in which someone delivers an extemporaneous monologue on a word that the audience suggests. Frank once went to an improv festival in Frederick, Maryland and was asked to give a monologue on a word. He then appeared in a scene based on the monologue. Frank points out that Jeff would improvise and speak extemporaneously on the radio. A late-night talk show has a huge staff to write a ten-minute monologue. Radio hosts have to fill four hours a day without a staff of writers. Jeff's birthday is October 1. Each year, Jeff told his Jeff & Jer Show listeners to say “Happy birthday Jeff” to get free admission to the San Diego Zoo on October 2 even though it was actually Founders Day and everyone got in free that day. One time Jeff & Jer announc that their staff member Randy was going to jump a bus in the Jack Murphy Stadium parking lot. People imagined an Evel Knievel style stunt. Instead Randy used jumper cables to jump start the bus. Support the Frank & Friends Show by purchasing some of our high-quality merchandise at https://frank-friends-show.creator-spring.com Sign up for a 30-day trial of Audible Premium Plus and get a free premium selection that's yours to keep. Go to http://AudibleTrial.com/FrankAndFriendsShow Find us online https://www.FrankAndFriendsShow.com/ Please subscribe to our YouTube channel at https://YouTube.com/FrankAndFriendsShow and hit the bell for notifications. Find the audio of the show on major podcast apps including Spotify, Apple, Google, iHeart, and Audible. Find us on social media: https://www.facebook.com/FrankAndFriendsShow https://www.instagram.com/FrankAndFriendsShow https://www.twitter.com/FrankNFriendsSh Thanks!
Franking #1 - E' Cossi Bello Essere Re (Instrumental) Dr. Togo - Be Free Electric Mind - Zwei Alec Mansion - Laid, Bête et Méchant Liquid Heat. - Robot Parade Superior Elevation - Computer Woman Sun - Dance (Do What You Wanna Do) Sunshine - Boogie On Up Silver Lining - Silver Lining Norman Connors - Mr. C Blackbyrds - What's On Your Mind Afterbach - Wanna Fill You Up Marathon Band. - Travellin' Shoes Direct Pressure - Love Flight Gilles Rivard - Entre Paranthèse
फ्रँकिंग(franking)और स्टॅम्प पेपर इसमे क्या फरक है ये बताएंगे लीगल एक्स्पर्ट अरुण देशमुख In Hindi Difference between stamp paper and franking explained by Legal expert Lion (adv)Arun Deshmukh. Lion (adv) Arun G. Deshmukh is a writer of 26 books and has vast Legal knowledge. FACEBOOK https://www.facebook.com/lionarundeshmukh INSTAGRAM www.instagram.com/5advarundeshmukh THANK YOU!
CLICK HERE to sign up for a free trial of the Marcus Today newsletter including our daily STRATEGY PODCASTThe market is taking a bit of a beating as BHP goes ex-dividend and the iron ore price falls another 6% after China reiterates its limits on steel production. Coal up. Banks dead in the water. Tech stocks up. Focus on US Jobs tomorrow night. We look at why jobs matter and unveil the ridiculous Australian jobs fudge. RBA Meeting on Tuesday. FMG ex-dividend on Monday. We do a bit of education about dividends and the folly of chasing franking. We have a look at a few Technical scans and note that "On this Day" Japan surrendered and London burned.
Lion (adv) Arun Deshmukh is a Social Worker, Writer of 30 books in sports and law, and a recognized Sportsman. He has coached more than 300 National and state players in Kho kho and Langadi, and is the recipient of the Shiv Chatrapati Best Coach award of Maharashtra state for kho kho. As Lion presently he is the Zonal Chairman(incoming) of District 3231A1 and President of Lions club of Mahim. Today we are going to see How to do E-franking Did you know that we can do e-franking from home? Did you know it is easy to do e-franking? Please see the video till last so you can better understand how to do e-franking How to do E-franking? We will see the easy way to do e-franking You can watch our last video about franking click the link below... Hindi Video https://youtu.be/Xp4numSNfEY Marathi Video https://youtu.be/TipjWcPLMUs FACEBOOK https://www.facebook.com/lionarundeshmukh INSTAGRAM www.instagram.com/5advarundeshmukh Contact For, For getting personal legal guidance you can contact him on +91 98192 56488 THANK YOU!
Lion (adv) Arun Deshmukh is a Social Worker, Writer of 30 books in sports and law, and a recognized Sportsman. He has coached more than 300 National and state players in Kho kho and Langadi, and is the recipient of the Shiv Chatrapati Best Coach award of Maharashtra state for kho kho. As Lion presently he is the Zonal Chairman(incoming) of District 3231A1 and President of Lions club of Mahim. Today we are going to see How to do E-franking Did you know that we can do e-franking from home? Did you know it is easy to do e-franking? Please see the video till last so you can better understand how to do e-franking How to do E-franking? We will see the easy way to do e-franking You can watch our last video about franking click the link below... Hindi Video https://youtu.be/Xp4numSNfEY Marathi Video https://youtu.be/TipjWcPLMUs FACEBOOK https://www.facebook.com/lionarundeshmukh INSTAGRAM www.instagram.com/5advarundeshmukh Contact For, For getting personal legal guidance you can contact him on +91 98192 56488 THANK YOU!
Despite leading all asset class returns over the last three years, gold bullion remains misunderstood and underappreciated as an investment. After reaching all-time highs in 2020, the precious metal is becoming more common in portfolios for its ability to hedge against volatility. With income starved investors potentially facing negative interest rates, gold stands out as one of the very few truly alternative assets. But what does this mean? And why is it important? In this session we will discuss the growing importance and changing nature of gold bullion in portfolios and the less considered currency or inflation risks.General Advice Disclosure: This podcast is General Advice only. We have not considered investors personal or individual circumstances. All listeners should seek professional advice before acting on any recommendation.
With major Australian companies cutting and deferring dividends, investors relying on equities for income are facing a challenging year ahead. Martin Currie’s Australian equity team have crunched the numbers and estimate a cut of 40% in yield for the ASX200 in 2020. ----more---- So what are investors to do? In this timely conversation, investment specialist Eu-Jene Teng outlines: The expected fall in earnings from Covid19, and how quickly investors can expect a bounce back How dividends are likely to fare Whether payout ratios are likely to be reduced permanently and what that means for equity investors Which sectors offer the most promising outlook for yield, and How to position your portfolio to minimise the damage of an economic downturn. You can access this and previous episodes of the Your Wealth podcast now on iTunes, Podbean, Spotify or at nabtrade.com.au/yourwealth If you’re short on time, consider listening at 1.5-2x speed, which should be shown on the screen of your device as you listen. This won’t just reduce your listening time; it has also been shown to improve knowledge retention.
This is a live recording of our inaugural live web event. The chat box exploded as the audience interacted with this weeks show and with the awesome feedback we promise Trenches Live will be back soon. After the usual best and Worst BGL Founder and CEO Ron Lesh is taken of the Lesh and delivers his usual direct shot of reality into the debate amidst calls from the chat box for him to run for PM! Lee Duffield from All in Advisory and Nat Lennon from Two Sides Accounting, two brilliant public practitioners, join to answer the questions that matter from those in the trenches What did you learn about yourself? Has your relationship with your business changed? News round up Best on Ground Paul Meissner Accountants and Bookkeepers handling JobKeeper, cash boost, etc. Psychologist (client) story. Robyn Jacobson moves to the TIA. Interesting given this puts a tenacious advocate for taxpayers in to an organisation that has some clout. Could we see better advocacy from professional bodies?? https://www.taxinstitute.com.au/timediarelease/the-tax-institute-appoints-tax-leader-robyn-jacobson-as-senior-advocate Tax jokes in TV series. Schitts Creek (Netflix) very funny scene on trying to claim personal stuff as a business expense. https://www.linkedin.com/posts/mark-newman-accountant-for-builders-electricians-trades_thats-not-a-write-off-scene-from-schitts-activity-6661776582073425920-5a0y David Boyar Early suggestions of tax reform - Nixing Consumption taxes the way GST intended https://www.linkedin.com/feed/news/car-sales-cut-in-half-by-pandemic-5185554/ Is the VCFOA back, great job and reframing different types of advice during a recession https://vcfoassociation.com.au/surviving-and-re-booting-are-2-separate-problems/ The DropBox Blog is beautiful. Relevant and https://blog.dropbox.com/topics/work-culture/distributed-work-setting-boundaries?utm_source=twitter&utm_medium=social&utm_campaign=distr-work&utm_content=boundaries Worst on Ground Paul Meissner Professional bodies lack of real support during this time Ineffective in Canberra No tools/resources No additional member contact, not even an email from the org, ceo, etc Only contact was selling/promoting products Hey hey CA video’s, I get it, it was fun, but where’s the practical effort. David Boyar Small biz accountants not at the table in canberra and thats why everyone got stressed. The cause of stress wasn’t the ATO updates, it was that legislation did not consider how small biz accountants advise clients. ATO forced to run on its feet 3 big red marks - Accountants exemption, Franking credits, JK rules Bodies did an excellent job explaining AFTER the fact Accountants continually unsung https://twitter.com/LieletteCalleja/status/1258218705571311616
Welcome to Finance and Fury, the Say What Wednesday Edition. This weeks question comes from Gab. “I had a question regarding a leveraged ETF from Betashares called GEAR. It is designed to offer around 2:1 exposure to the ASX 200, with 0.8% management cost. Looking at the long term growth and dividends, it seems like an excellent way to get exposure to the market and bank in around 20% franked divided (at 107% ??). Also no margin calls .... Am I missing something? It seems too good!” Not personal advice – Just general information GEAR The Fund is ‘internally geared’, meaning all gearing obligations are met internally by the Fund. How this works - combines funds received from investors with borrowed funds and invests the proceeds The Fund’s gearing ratio (being the total amount borrowed expressed as a percentage of the total assets of the Fund) is managed between 50-65% This is the LVR - rebalance the LVR to the middle of the range (i.e. 57.5%) whenever it reaches either the minimum 50% or maximum 65% threshold Current gearing ratio – 60.1% - As at 27 April 2020. Calculated as Fund borrowings divided by Fund total assets. Current Gearing Ratio is as at start of the above date and can be expected to vary throughout the day. Current gearing multiple – 2.5 - Represents the Fund's approximate exposure, for the above date, to movements in the Australian share market (as measured by the S&P/ASX 200 index). For example, if the Fund's gearing multiple is 2.1x, and the S&P/ASX 200 index goes up 1% that day, the Fund would be expected to go up approximately 2.1% that day. A LVR ratio of 65% means that for every $1 invested, an additional $1.86 is borrowed to invest (providing a gross exposure of $2.86 for every $1 invested) What they invest in – passive investment strategy - ASX 200 Index broadly diversified share portfolio consisting of the largest 200 equity securities on the ASX by market capitalisation (as measured by the S&P/) designed to provide leveraged exposure to a passively managed portfolio of broadbased Australian equities. The Fund will gain its Australian equities exposure by investing in the constituents of the S&P/ASX 200 Index, weighted by market capitalisation How it operates – they use just one lender to gear - Deutsche Bank AG as the Lender to the Fund. At the time of review, the Manager has disclosed the Fund's borrowing cost as 1.85% p.a. – but their underlying costs are lower – MER at about 0.8% At the moment – a lot of gearing funds are cheaper – massively low cost to borrow due to lower interest rate environment – That is one thing to watch out for – if funding costs go up, the MER goes up quite a bit – these types of geared funds were sitting at between 3-6% not that long ago – so that would reduce future gains Price movements – was at $94 – price currently at $13.76 Did hit $10 at the bottom. But unlike margin loans - GEAR gives you the opportunity to make magnified gains when the Australian sharemarket rises, and vice versa. Income yields – do look good at the surface level – Good dividend levels and also franking levels – but this is due to the gearing of the funds 12 month distribution yield – 16.7% - but grossed up including fanking credits = 24.4% Figures based at 31 March 2020. Yield figures are calculated by summing the prior 12 month net and gross fund per unit distributions divided by the fund closing NAV per unit. Franking level is total franking level over the last 12 months – have the disclaimer of Past performance is not an indicator of future performance. They say their level of franking is 107.6% - Looks a little Skew due to the Gearing – Break it down – they are a passive index fund – in the ASX200 – what is the ASX200 dividend yield – What is the franking? Now apply the gearing ratios – 2.5 times the funds invested - It does amplify the incomes – ASX200 – about 5% p.a. = close to about 13% Franking – ASX has about 62.42% franking as well – so grossing this up allows for additional flow throughs for distributions comparisons in distributions – First of 2020 - $1.02 – 12.25% yield based around the lower price 2019 - $1.76 distribution – 13.43% yield 2018 - $1.65 distribution – 15.83% yield 2017 - $1.37 distribution – 15.27% yield 2016 - $0.94 distribution – 9.19% yield It is calculated as the difference between total Fund return and NAV return. NAV return is the change in the Fund's NAV price. Total return is the NAV return plus reinvestment of all distributions back to the Fund. Past performance not indicative of future performance. Good incomes – but the total returns need to also be looked at – 3m – negative 54.39% - 1y is about negative 45% - but the average annual return is -9.01% These include the distributions though – quoted returns = Returns are assuming income is reinvested – and does not take into account tax Returns have two components – incomes and growth = total return - Capital growth versus income – Distribution on income – taxable – but do get the franking credits to offset this – so in a lot of cases – taxable incomes of about $40k and above would result in net 4.5% tax payable Exchanging growth for income which gets taxed Reduces the yields a bit when breaking it down - Is it a good time to buy? It is all relative – good to time buy compared to 3 months ago? Yes 3 months from now- maybe not - Would caution against it for now – likely the ASX isnt through the woods – In addition – the growth returns on geared funds at this stage do have some longer term upside But overall - When it comes to geared funds – they are ones that do almost need to be timed to work well – Typically invest when the market is low – avoid buying when funds are slightly higher The returns are amplified but the issue is that the losses are amplified You lose 50% - you have to make 100% return back to original value Whilst geared – one or two bigger declines in a decade – which can happen – wipe out potential growth returns – As can be seen now – has a negative return since inception – and this includes the distributions being reinvested Also – if the funding rate costs do go up – could result in lower payments of distributions Thank you for listening to today's episode. If you want to get in contact you can do so here: http://financeandfury.com.au/contact/
Welcome to Finance and Fury, the Say What Wednesday edition. This week, the question comes from Andrew: "Last episode you mentioned super and a product that lets you invest in third party platforms. Would like to hear more about that." What is super? Most people think of superannuation as just something your employer pay in to so that when you turn 60 you can access it. Even though your employer pays into super, that is your money! 9.5% on average don’t care and why would you right? out of sight, out of mind and decades away from becoming relevant. If you could log into your bank account and click a few buttons to save a few hundred dollars a year, would you? The real cost of super is opportunity cost – doing nothing now will hurt Any problem ignored long enough will grow – until it is too late Pay attention and make it work – don’t regret the future One thing I hear clients say all the time is ‘I should have looked at this years ago’ – regret is worse than effort What are your options: Super is a vehicle to invest funds for retirement – A car is a vehicle You can get a Mazda, or Mercedes but the aim is to get you from point a to b! Like cars there are different types of super accounts with different features Have many types – but major three types – Industry, retail or SMSF Industry Industry super funds are multi-employer funds (employer associations and unions). Investments - limited to around 10 multi-sector investment options (eg. Growth, Conservative, Balanced), limited insurance options Retail – Platforms for investments – can be for investments but also super A Master Trust is a superannuation fund in which a large number of members deposit their money. The trustee of the Master Trust pools the money together and purchases interests in the underlying investments, typically managed funds. The value of the investments of each member incorporates the fees, franking credits and some taxes from the underlying investments. WRAP account – External super trustee but you have control over investment decisions You get a cash account Then you select third party investments – Managed funds, Direct Shares, LICs, ETFs Breakdown Both types of accounts are operated by a trustee WRAP - the investor holds the underlying assets in their own name For master Trusts - Investments are held by a trustee in its name, on behalf of the investor Both Wrap Accounts and Master Trust May hold managed funds – but different type and flow through of distributions Wrap accounts have access to the wholesale managed funds pricing, as well as direct investments such as shares and term deposits Franking credits are distributed to individual investors through the cash account Master trusts allow access to managed funds but at a badged cost – incorporate fees into the unit pricing and take it out prior to passing on returns – similar to Industry funds Franking credits are incorporated into the unit price of the underlying investment How valuations work – and the costs for each of the accounts WRAP - The value of a member’s investment is determined by the underlying assets All fees and taxes are unbundled from the unit price and disclosed separately Master Trust - The value of an investor’s account is determined by the trustee based on the value of the underlying investments All fees and some taxes are bundled into the unit price for each investment and allocated to the investor Cash management and investment planning WRAP accounts - A cash account is used for each member through which income and expenses are passed An investor’s assets in a wrap account can be transferred to a new wrap account – in specie Master Trust - Income from the underlying assets is paid to the master trust and then distributed to members If you want to change to a different master trust you will need to sell your investments in your current master trust, which may result in a taxable capital gain or a capital loss, as well as other transaction costs What are the advantages of wrap accounts and master trusts? These administration structures are designed to provide different benefits – Access to a wide range of investments including low-fee wholesale funds, plus any cost savings that may apply as a result of pooling a large number of investors’ monies Comprehensive and consolidated reporting and valuations for all your investments in the structure online access so it’s easy for you to keep up-to-date with your investments transparent fee structure so you know what is being paid on your behalf Biggest is the range of investments – having the direct flow through to your account rather than it being passed on at the fund level – flexibility in investment planning What’s right for you? Have larger sums of money to invest, Require access to direct investments and a very broad range of managed funds, want to be hands on and Want sophisticated reporting, Wish to benefit from franking credits being credited directly to their account. Industry – low options, standard based on risk profiles What to do to make sure you make the most out of it? Most important thing is to Pay attention – get the right investments Cars: You can have a Ferrari but if the driver (investments inside the account) is awful, the car may crash! Not getting to point B! Make sure your contributions are going in there Treat it like your own, cause it is – If you think you don’t have any investments, well you do in your super Managed funds are investments – just doesn’t look like it with industry funds Thank you for listening to today's episode. If you want to get in contact you can do so here: http://financeandfury.com.au/contact/
Welcome to Finance and Fury, The Say What Wednesday edition This week the question from Jayden – Are CBA and other bank shares a good investment for dividends at the moment? Based around current price and un-updated yields – Based around prices and assuming dividends will continue to be the same – might say yes – end of the episode – thanks for listening – but wait - is there something else going on? Start with Some Banks are close to their post GFC prices – ex CBA – does this mean they are a good time to buy? Few things happening – The Council of Financial Regulation - (the Council) is the coordinating body for Australia's main financial regulatory agencies. There are four members: the Australian Prudential Regulation Authority (APRA), the Australian Securities and Investments Commission (ASIC), the Australian Treasury and the Reserve Bank of Australia (RBA) RBA – Governor chairs the Council and the RBA provides secretariat support. It is a non-statutory body, without regulatory or policy decision-making powers Objectives are to promote stability of the Australian financial system and support effective and efficient regulation by Australia's financial regulatory agencies. But they all have their part to play in controlling the financial system – in particular, APRA, RBA, and Treasury Recent developments – QE - RBA is ready to purchase Aus Government bonds in the secondary market Between three entities – Super funds controlled by APRA, RBA who is doing the buying, and Treasury who is doing the selling of the bonds to the super funds on the primary markets Repo Market – RBA also conducting one month and three month repo operations in the daily market – until further notice Additional Repo market – conduct repo operations of six-months maturity or longer at least weekly, as long as market conditions warrant Statement - APRA is ensuring banking institutions pre-position themselves to take advantage of the RBA's supportive measures Forcing banks to enter the repo agreements of exchanging their treasury notes for the injection of liquidity Why? They say they are wanting to support the smooth functioning of that market, which is a key pricing benchmark for the Australian financial system. The Reserve Bank and the AOFM - The Australian Office of Financial Management is a part of the Department of the Treasury. It manages the Australian Government's net debt portfolio - are in close liaison in monitoring market conditions and supporting the continued functioning of the market. Statements - Australia's financial system is resilient and it is well placed to deal with the effects of COVID-19. The banking system is well capitalised and is in a strong liquidity position. Substantial financial buffers are available to be drawn down if required to support the economy. The RBA is trying to support the liquidity of the system – this is where repos come into it – giving the banks and financial system enough cash to survive As part of this support it will be conducting one-month and three-month repurchase (repo) operations until further notice. In addition, it will. The Australian Prudential Regulation Authority. But the Government are the ones creating disruption to the whole economy – When they shut everything down and nothing happens – they will turn around and pat themselves on the back saying ‘good job’ we saved lives – whilst destroying livelihoods and further enshrining an autocratic financial system Interesting statements – “APRA and ASIC will take account of the circumstances in which lenders, acting reasonably, are currently operating during the prevailing circumstances when administering their respective laws and regulations. Both agencies also stand ready to deal with problems firms may encounter in complying with the law due to the impact of COVID-19 through a facilitative and constructive approach. In particular, each agency will, where warranted, provide relief or waivers from regulatory requirements. This includes requirements on listed companies associated with secondary capital raisings, annual general meetings, and audits. ASIC will also work with financial institutions to further accelerate the payment of outstanding remediation to customers as soon as possible. Second Capital Raisings – The ability of companies to raise equity capital in the virtual absence of alternative debt issuance or bank funding Is seen as an important safety valve that enables companies to reduce debt exposure and shore up balance sheets Something deeper is going on – A shortage of Dollars and funding mechanisms for the financial system – requiring the liquidity injections – all because the World has been hit with Margin Calls - $12 trillion – banking system is fragile Go back to 2009 - Fed's emergency response during the GFC - which included credit facilities backed by corporate bonds and even shares - all the way to unlimited FX swap lines with foreign central banks – all of this was in response to a massive margin call that resulted in the aftermath of the Lehman and AIG collapse – as the conventional cross-border funding pathways froze up Therefore – this forced Central banks like the Fed to step in and flood the world with dollars to avoid a catastrophic surge in the dollar as the entire world scrambled to obtain the world's reserve currency. Post GFC - the BIS published a paper titled "The US dollar shortage in global banking and the international policy response" – explains how the then Chair Ben Bernanke bailed out the entire developed world’s financial system – due to facing the dollar shortage crisis due to the sudden deflationary shockwave unleashed by the GFC – At the same time - ground the global economy, and conventional dollar funding pathways to a halt While at the same time reached all-time highs in the counterparty risk after Lehman's collapse and liquidity concerns compromised short-term interbank funding – short term loans to each of the banks – as banks didn’t trust each other – no longer would provide the contracts – why the repo market is so fragile at the moment – needing central banks to provide the funding instead of other commercial banks Wasn’t just USA – Aus and EU as well - the major European banks’ US dollar funding gap had reached $1.0–1.2 trillion by mid-2007 – but all liabilities to non-banks were estimated to be $6.5 trillion Essentially - an unprecedented crisis as a result of a global dollar margin call Had the Fed not stepped in with a barrage of liquidity-providing instruments and facilities, the rest of the world would have simply collapsed as the $6.5 trillion dollar funding gap closed in on itself - this triggered the first-ever launch of virtually unlimited dollar swap lines between the Fed and all other central banks – therefore the severity of the US dollar shortage among banks outside the United States, like Aus banks, called for an international policy response. Remember – central banks can provide their own currency – but they could not provide sufficient US dollar liquidity – which acts as the global currency reserve Requires reciprocal currency arrangements (swap lines) with the Federal Reserve in order to channel US dollars to banks in their respective jurisdictions – therefore as the funding disruptions spread to banks around the world, swap arrangements were extended across continents to central banks in Australia and New Zealand, Scandinavia, and several countries in Asia and Latin America, forming a global network The swap lines between the US Fed and RBA are there – along with the Reserve bank of NZ and every other major banks Remember – ever since the financial crisis nothing has been actually fixed in the structural issues of the financial system - instead, the Fed and now other central banks inject more liquidity every time the system gets stressed – like now But all done through the issuance of even more debt, and kicking the can down the road whilst masking the symptoms of the crisis This liquidity upon liquidity has only made the system much more reliant on the Fed's constant bailouts and liquidity injections. This can be seen by the events over the last few week - the dollar shortage is back with a vengeance, as confirmed by last week's concurrent surge in both the Bloomberg Dollar index and the FRA/OIS spread – used as an indicator of interbank dollar funding availability. As it stands - there is now - in JPMorgan's calculations - a global dollar short that has doubled since the financial crisis and was $12 trillion as of this moment, some 60% of US GDP Enter the Government responses to the novel coronavirus and subsequent oil crisis - has led to a historic run on the dollar – so the supply chains is a payment chain in reverse - an abrupt halt in production and economic output created by Governments extreme overreaction can quickly lead to missed payments elsewhere – multiplier effect – this is why we are seeing the combine rate cuts with open liquidity lines through Repo and QE and a pledge to use the swap lines So the financial system is fragile – and the flow on effects from Governments are unknown at this stage – so Looking directly at Big 4 ASX listed banks– Fundamentals at this stage and Capital raisings – shares listed Looking at the bank shares – their prices and Shares issued - Price Pre GFC Post GFC Price 1 month ago Price Today Yields PE Outstanding shares growth CBA $60.00 $26.79 $88.80 $67.87 6.37% 12.28 14.16% ANZ $30.39 $12.06 $27.24 $18.39 8.70% 8.63 10.76% WBC $29.00 $14.52 $25.21 $17.54 9.97% 9.21 15.32% NAB $40.52 $17.67 $27.41 $17.45 9.51% 10.03 32.91% Revenues - Might be further rate cuts – Banks businesses rely on lending – and as lending rates drop – so does their ability to generate a return Though many in the markets spent much of last year focusing on how lower interest rates would impact bank profitability, that problem seems somewhat less pronounced in the current environment of panic and future default potentials The Net interest margins – (interest income to interest paid out, as there isn't anything paid out) – therefore this pressure may be overstated – the real threat to banks comes from the asset quality (loans) from a slowing global economy - bad debt charge forecasts for each of the major banks have been increased by $300M p.a. Real issues comes from bad debts For example- WBC - increased their bad debt charge forecasts to $1,200 million – across FY20 and FY21. ANZ - increased by $300M to be $1150M for FY20 and $1200M for FY21 Why you are seeing the Banks with Hold ratings on NAB, WBC and ANZ – CBA has Buy across a few brokers CBA is better positioned than the other big four to mitigate the impact of lower interest rates (even if its impact is overstated), a fact that potentially explains why the biggest of the big four has traded at a premium to the other banks in the last 14 months Summary – Assumptions around buying Long term – If the central banks can provide enough liquidity and that defaults on loans don’t become prevalent – yes – banks should recover in prices Dividends – may have to cut from here – but still technically a good dividend payment even if a 30% drop – down to 7% FF in a lot of cases I view bank shares as good-paying Term Deposits with Franking credits – don’t view them as good long term growth companies – competitive markets But the prices from here – depending on the central banks kicking the can down the road – do have the ability to drop in further panic Thank you for listening to today's episode. If you want to get in contact you can do so here: http://financeandfury.com.au/contact/
Welcome to Finance and Fury, The Furious Friday Edition Today, the episode is delving a little deeper into superannuation I Work as a financial adviser – see a lot of changes to the legislation of superannuation since I joined the industry in 2011 – Today - Episode on my theory of superannuation from a viewpoint you might not see anywhere else History of Super – From 1970s - superannuation arrangements were in place were set up under industrial awards negotiated by the union movement – nothing like currently – they were union/company run 1983 - A change to superannuation arrangements came - through an agreement between the government and the trade unions Called “Prices and Incomes Accord” - the trade unions agreed that their members (workers) forgo a 3% pay increase to instead direct into the new superannuation system – important point of forgoing salary increase – come back to later This 3% was also matched by employers' contributions the employees' income – Though there is general widespread support for compulsory superannuation today, at the time of its introduction it was met with strong resistance by small business groups who were fearful of the burden associated with its implementation and its ongoing costs – still – passed anyway due to union support Created 6% in total for union/Government workers – but didn’t exist across the board yet 1992 - the Keating Labor Government - compulsory employer contribution scheme became a part of a wider reform package - "Superannuation Guarantee" (SG) contributions Why? Reasoning of Australia, along with many other Western nations, would experience a major demographic shiftin the coming decades, of the aging of the population, and it was claimed that this would result in increased age pension payments that would place an unaffordable strain on the Australian economy. The proposed solution was a "three pillars" approach to retirement income: compulsory employer contributions to superannuation funds, further contributions to superannuation funds and other investments, and if insufficient, a safety net consisting of a means-tested government-funded age pension. The Keating Labor Government had also intended for there to be a compulsory employee contribution beginning in 1997-98, with employee contributions beginning at 1%, then rising to 2% in 1998-99 and reaching 3% in 1999-2000. However, this planned compulsory 3% employee contribution was cancelled by the Howard Liberal Government when it took office in 1996. By 2002-03 - Howard Government - The employer SG contribution was allowed to continue to rise to 9 Limited employer SG contributions from 1 July 2002 to an employee's ordinary time earnings Before this – no cap in conts The SG rate was 9% from 2002-03 to 2013-14, when the Rudd-Gillard Labor Government passed legislation to increase SG contributions to 12% by 1 July 2019 - originally intended by the Keating Government in 1995 – but got strong opposition and replaced by Howard Abbott Liberal Government deferred the start of this planned increase to the SG by six years, from 1 July 2015 to 1 July 2021. The SG rate has since 1 July 2014 been- from 9.5% and in July 2021 the rate is planned to increase by 0.5% each year until it reaches 12% by 2025. Super Today – has grown massively – increase in compulsory contributions, being tax-effective, and strong market growth It is massive – Estimates show it is likely cracked the $3trn mark as of last month – ASX is about $2trn – remember that every super fund has money in ASX products – so even assuming a 25% = $750bn of the market cap = 37.5% of ASX Massive inflows as well - $120bn p.a. of employee/member contributions The Australian industry superannuation funds is under fire for re-investing funds into questionable investments, to benefit related parties ahead of the investor. Thus, a conflict of interest exists with the parent entity re-investing funds into funds related to the parent entity. Thus the best rate of return is never sought out, and the bank or entity investing the money is not seeking the highest rate of return. Money in certain investments now is a concern - Debt - Bonds – Corporate and derivative position – repo markets Property – Build to rent schemes – especially for Gov buildings to occupy using tax payer funds Index – buying into markets and pushing prices up – for no fundamental gains Most non-self managed funds only provide very minimal information to the account holders about how their money has been invested. Usually, only vague categories are provided, such as "Australian Shares", with no indication of which shares were purchased. This makes the fund's management largely unaccountable to their members. Examples of legislation or policy changes that work against you – political/fiscal or monetary policy bank accounts Fiscal is taxes – where super in accumulation and now pension if you work and below 65 = taxed Also – money available to buy government debt to fund their expenditure Monetary is QE and having Where is also gets more corrupt - Who started super? Labour – but Liberals have helped it too – so it is a joint political effort But super is not all made equally – think super industry all gets along? Current political battlefield in my opinion Industry funds – Their investment options managed by them, control of flow, or at least who the money is given to for investment management WRAP platforms and SMSFs – ones outside of political control/backing You decide where the money goes – not the default option almost everyone is in with Industry super MySuper -default offering based around your age – used to be balanced across the board – but FOFA and stronger super reforms changed all of this These came from a campaign created by a Genuine politician - Bill Shorten – Shorten was elected to the House of Representatives in 2007 - was immediately appointed a parliamentary secretary – had almost a few years’ experience in the union Shorten was elected as the AWU's national secretary in 2001 and was re-elected in 2005. He resigned as Victorian state secretary of the AWU in August 2007. He was also director of the Superannuation Trust of Australia (now Australian Super) and the Victorian Funds Management Corporation. Any guess who some of his largest political donors were for his elections? AWU made $25k, but AusSuper made $25,500 to AWU just before – all of this happened in 2006-2007 just before his first run into politics Shorten - Assumed office in 2007 – became minister for financial services and superannuation, assistant treasurer and Minister for Workplace Relations in the Gillard Government in 2010 – Took him 3 years – must have been impressive – after graduating from Arts/Law degree – worked as a lawyer for 20 months then left to become a trainee union organiser. Worked his way up in the unions until becoming Vic state security in 1998 – where he remained until taking office in 2007 Corruption internally as to where super funds are invested – Publicly – buying Gov bonds – might get a gov job later/funded for office – or vies versa Privately - Example of how this would play out – Say you are a board member, and some business/share or property area you have a financial interest in would benefit from an investment/boost to demand = direct the funds there – Aus Super is very transparent when it compares to other Aus industry funds – go to the end page One area they don’t disclose so well is private equity – they tell you the private companies but not the amounts Regulation changes under FOFA – Insurances of fofa – super v non-super IP Financial advice regulations – Allowed for banks, industry funds and product providers to continue to make money of their products for recommendation, but banned any other adviser have the same opportunity through nil-entry products Im all for this – Advisers shouldn’t get it – charge for a service provided – as opposed to poaching wealthy clients with $1m+ to make 3.3% on placing their money - but nor do I think industry funds charge management costs through investments if it is being outsourced, who charge their own costs (as an ICR) Also – nepotism in construction projects – safe secure investments into Government buildings which the tax payer pays for – Bris is a good example - Cbus invested – Super funds used to pass the borrowing/construction financing costs to the investors – without disclosing it – now it is at least disclosing, but not included in the costs of the investment directly - More recent 2019 election campaign - Shortens proposed legislation changes Franking credits – split in who gains the benefits – in pension phase, SMSF or WRAP gains 100% of benefits – but in unitised structures, tax offsets go to the overall fund – so the returns while not taxed, will be lower on FF income Trust taxes – potential to destroy SMSF structures – as they are non-unit in structure Just saw that every bit of regulation went to help the industry funds, while hurting accounts where you can control your funds. The Government will likely continue to intervene with the super industry – lots to gain and may ways to do it Tax side – easy on the fiscal budget – already done a bit – the introduction of tax in super – increase in taxes on contributions for those earning more than $250k (30% instead of 15%) Consumer protection - Losses to the superannuation funds from the global financial crisis have also been a cause for concern, said to be around $75 billion. Initial financial discussions determined that the Australian economy would be at risk if citizens were allowed to immediately access and withdraw Superannuation, further confirming the belief that mandatory Superannuation may not be a viable long-term fiscal management tool. This was compounded by a lack of proper industry regulation, allegations of fraud and financial misconduct and a host of other issues currently plaguing the industry as a whole - "Thousands of superannuation fund members defrauded in Trio Capital scandal" A sudden outflow – say people could access and just withdrew – markets could collapse – as billions if not trillions may flow out And create other bubbles – like in property – reallocation of resources Summary Lots of money flowing in – likely yours – Pays to know where it is – and be aware of what powers that be have in plan for your super money The inflow of SG - https://www.superannuation.asn.au/resources/superannuation-statistics Thank you for listening to today's episode. If you want to get in contact you can do so here: http://financeandfury.com.au/contact/
Matt Davies-Adams is here with Adrian Clarke and Sam Parkin to discuss a lot of the EFL. We speak with Brentford boss Thomas Frank about their start to the season, and with Exeter's Matt Taylor about the perks of being a footballer. Plus we play manager Tinder, whether being bald makes refs book you more, and an awful lot of mistaken identities. RUNNING ORDER PART 1a - Knee slides, mistaken identities and being bald (01.00) PART 2a - Tuesday night review including wins for Leeds, Hudds and Fulham (05.30) PART 2b - Derby's terrible trio (11.40) PART 2c - Birmingham v Middlesbrough preview (15.00) PART 2d - Brentford boss Thomas Frank (18.10) PART 2e - Forest v Brentford (23.10) PART 2f - Championship odds (25.30) PART 3a - Wally is a wally (27.30) PART 3b - Henrik might still go to Southend (30.10) PART 3c - Congratulating Bristol Rovers (34.00) PART 3d - Fleetwood v Ipswich preview (38.00) PART 3e - League One Odds (43.10) PART 4a - Exeter manager Matt Taylor (44.20) PART 4b - Sam's tree surgeon story (50.30) PART 4c - League Two odds (51.30) PARISH NOTICES: get your bet on with William Hill here (https://sports.williamhill.com/betting/en-gb/football) WE’VE GOT A NEW WEBSITE! check out thetotallyfootballshow.com (http://thetotallyfootballshow.com/) ! GET IN TOUCH: Send us a tweet: @theTotallyShow (https://twitter.com/TheTotallyShow) Find us on Instagram: @totallyfootballshow (https://www.instagram.com/totallyfootballshow/?hl=en) Like us on Facebook: @thetotallyfootballshow (https://www.facebook.com/thetotallyfootballshow/)
Welcome to Finance and Fury, the Say What Wednesday Edition Today's episode is about building wealth and getting ready for retirement Keeping with the Theme – Solving the economic problems Using the resources you have (income, savings, equity, etc.) to get what you want Today – run through considerations to take when looking at accumulating wealth for retirement Like last few episodes – doesn’t have to deal so much with age – but you own situation Some want to retire at 50, others 70 if ever First step – What are your retirement lifestyle costs like? Types of expenses to account for Essential costs – Food, bills, - what your basic budget looks like Discretionary costs – Holidays, dinners out – enjoying the good life What will this cost you? Asic money smart – has benchmarks – But work it out for yourself What do you spend today on the essentials and what would you like to spend? By the time you become FI – probably won't have a mortgage – so can neglect this cashflow requirement if paying it off can be managed How much will you need invested to fund this? Asset levels and types are Income-based – work off 4 to 5% p.a. income yields as a rule of thumb Rule of 20 to 25 – What is the income that you need times by 20 or 25 – depends on the yields of the investment 4% = 25 times or 5% = 20 times – This is for the ability to not deplete capital in retirement $100k income = $2m in today's funds at 5% p.a. or $2.5m at 4% p.a. Might see figures of $300k in super – but that is assuming you draw it down to $0 and die exactly when you forecast – better to have an income source in perpetuity to avoid longevity risk Types of investments Yields and amounts Depends on what assets are held and the net incomes after tax Super – After 60 = Tax free income – no need to account for tax Accounts do have costs – may be a fraction of a % though Also – Min income drawdowns – 55-64 4%, 65-74 5%, 6%, etc Property – Net incomes need to be taken – after agents fees If personally held or in a trust – Tax may be payable as well Assuming all debts have been repaid as well – otherwise interest expenses Shares – Aussie shares – Franking credits can offset Earn about $100k of Dividends FF and with the FF of $42k on that – offset your $42k of tax Example - $1m of Aussie shares in Super – Paying a 5% FF div versus 2 properties for $500k each - renting at $450per week - Super - $71,428 versus Property – $34k p.a. = More than double income Monday Ep this week – GBI – Rather than traditional assets, will your investments generate enough income to maintain your expenses Property may be a good way to generate equity/value through leverage – but do the calculations to see if you can repay the debts and the gross incomes are enough – same with super – need income paying assets – not just $1m sitting in cash paying 1% When will you need it by? Working out when you need it by determines future values Example – Inflation of 2.5% p.a. in 20 years turns that $1m into $1.64m (1.025^20) Also important – how much you need to put away to hit this future value? Monthly investing – put some away each month – either SS or personal investing Need a help? Calculators on members section available – rough guide to how much to invest each month to hit the goals – doesn’t take into account super/tax/etc – just rough guideline If you want to retire before super preservation – Better to focus on personal investing Other considerations Debts – paying those down in time to alleviate cashflows – Personal debts/mortgages or investment debt – One will be deductible, but both eat into cashflow Personal should be the main focus – at least tax reduction is MTR for every $1 spent – but still spend $1 for cents back Supers – Are you already on track with your super? Do you need to adjust the asset allocations Higher growth – long timeframes Close to retirement – want the right asset mix in super – ability to have cash accounts to fund incomes/lump sums Lump Sums at retirement – either renovation costs, buying a new home Comes back to lifestyle – become a grey nomad – need a lump sum to buy the caravan – don’t want to borrow for this ideally – so have additional savings targets to meet goals/needs Investments – where they are held and are they providing enough income? Property/investment debts – No point having 20 properties if your net cashflow if $30k p.a. due to debt repayments – just need to work longer to pay back the debt then – can ruin retirement plans Shares or managed funds – Again – depends on your goals and level of income needed to if you need emergency cash funds if markets crash – share incomes can go down – same with MF distributions Other investments – business etc. – Strategies to take such as small business concessions Leading into Retirement – while you might be physically decaying, your finances don’t have to – threshold on funds needed is important to know - whole part of the journey Calculators and resources available in the members section on the website here https://financeandfury.com.au/member/ Back to answering questions from next week – so if you have anything you would like covered – https://financeandfury.com.au/contact/ on the contact page Thanks for listening,
Last episode of the month, means we're once again answering your questions. In this episode we're answering questions on: • Franking credits • Bonds and fixed income products • Mergers and acquisitions • International diversification and exchange rates • Facebook's new cryptocurrency Libra • Intrinsic value • Knowing when to sell If you want to ask questions for our next Ask Us Anything episode, reach out to us via email, social media or the Ask Us Anything section of our website. How to Get Involved in Equity Mates: • Equity Mates Website • Ask Us Anything Page • Thought Starters • Equity Mates Facebook Page • Facebook Discussion Group • Instagram • Equity Mates Twitter • Email (contact@equitymates.com)
Welcome to Finance and Fury, The Furious Friday Edition In this ep, we continue looking at the lucky country look at a downward spiral in growth – low growth traps – and how it is created by what is meant to help growth? Low growth trap – The big problem comes from just looking at the numbers – and basing policy around models Major part of the modern economy – looking at the numbers – I do it as well Numbers can be inaccurate, or misinterpreted – sometimes the models being used for numbers don’t get the answers that were expected Such as the RBA and rates – lowering them to boost the economy Nothing new as to why the RBA wants to drop rates – major banks think it will go down to 0.75% - Looking to take action to help stimulate Australian economic growth, employment, wage growth, etc. The question really is if this will work as the equilibrium models suggest – based around neo-Keynesian We should be seeing a pick up in inflation (CPI) rates – which is the trick – focus on a percentage which is ever compounding under the current system – another episode At least – why aren’t we seeing GDP growth, improvement in productivity or wages and employment? Big puzzle which almost every first world nation is trying to solve at the moment – and economists First – look at Productivity – this measures the quantity of the economy’s (or just a particular business’s) output of goods and services relative to its inputs of raw materials, labour and capital equipment – this is theory Productivity improves when a given quantity of inputs to the production process is able to produce a greater quantity of goods and services than before. It’s most commonly measured by reference to just one of the inputs, labour. So, it’s output per unit of labour, usually per hour worked. Main way to make workers more productive is to give them more or better machines and structures to work with. That is, to invest in more physical capital. Increasing workers’ education and training – “human capital” – also makes them more productive: better able to work with more sophisticated machines, to think of ways to make machines do better tricks, and think of more efficient ways to organise the work that’s done in a mine, farm, factory, office or shop. The main way to make workers more productive is to give them more or better machines and structures to work with – this is what theory says anyway – having something to measure In the present information and communication technology revolution isn’t transforming the economy to the extent that earlier general-purpose technologies – such as electricity, the internal combustion engine, the automated production line, and even running water and indoor toilets – did Why doesn’t the modern-day economy show the same levels of productivity or growth as in the past? partial explanation - that much of the benefits coming from the digital revolution are going unrecognised by a system of national accounts (gross domestic product) designed to measure the industrial economy Also - low population replacement rates – birth rates not keeping up with the aging population If it keeps up - future of weaker growth in consumer spending = lower incentive for firms to invest The increased complexity of a system requires a greater input to receive the same result Example – some of the smartest people finding new ways to get around laws/taxes – not picked up in GDP growth but for the most part – due to Modern economy – focus on economies of scale for cost reduction – not massive R&D projects (synergy between companies – merge) – creates very large companies over time Apple – Jobs was an innovator – but just took existing technology and made it much better for us to use – First smartphone was by IBM more than 15 years before Apple released the iPhone Can see this in the share buybacks occurring – UBS and Macquarie predicted Australian companies to do more share buybacks in 2019 – if Labor won the federal election – Franking credits, higher taxes – Dividends not valuable Not only doesn’t investor get that money to spend/invest – it just inflates the share price of the company US businesses have been using their profits not to reinvest but to pay big dividends and to buy back their shares on the stock market, hoping to boost their price What gets us out of this – Innovation – continue to increase our ability to create and we will be fine – new ideas, more people creating things that work to provide value to others lives - This is where some policies have had dramatic effects on our lives – the policy decision is working from an equilibrium model that is long past it’s used by date I think for the worse- house prices as an example – thanks to the compounding positive inflation rate target – very short-sighted policy Theory: key to productivity improvement is investment – particularly investment by businesses But to spur business investment – you need economic growth and the expectation it will continue But it can’t include a thing like innovation into an equilibrium model – could in a complex equation What the models are picking up – Innovation is fine, but the main way some new technology is “diffused” throughout the economy is by firms replacing their old machines and structures with new ones that incorporate the latest advances. Business demand for new and better things spurs innovation – it isn’t just big companies that innovate – it is small startups that then get bought out by the big players – look at Alphabet, FB, etc. – why innovate if you can buy? Innovation cant be forced – often accidents, or trying for one thing and getting something else – But if you are aimed at one goal and don’t get the result you want, you start again and disregard the by-product of the failed attempt – The government doesn’t directly invent anything – they find independent scientists and contract them to fund their research – researchers dream – recruiting people to continue doing what they were doing, but for you Investment is also an essential part of the continuous process of change in the industry structure of the economy, where changes in consumers’ preferences and other developments cause some industries to contract while others expand and new industries emerge. If firms are reluctant to invest, you don’t get enough expansion to offset the contraction. But what is businesses’ main motive for investing? Their expectations of increased demand for whatever they’re selling – marketing, higher production What happens to business investment when a recession/depression occurs, or they think it might? The recovery has been particularly weak in the 2007/8 crash compared to the great depression though Some of our GDP growth is the product of fiscal stimulus from governments – either liquidity or spending packages Low unemployment conceals a marked fall in the proportion of the population (particularly less-skilled middle-aged men) participating in the labour force - given up looking for another one - skills “atrophied” – loss of human capital to the Aus economy Get it? Weak economic growth in the advanced economies is discouraging businesses from investing. Weak investment means weak productivity improvement and skills atrophy. But weak productivity means more weak growth. Business investment in physical capital, and growth in human capital are key drivers of the economy’s “potential” growth rate in future years. Neglect them and the economy loses its ability to grow – starts to decline and go backwards – Or remain in a low-growth trap What stops drive for innovation? No demand from companies for new and better products – Either no money to afford it – costs/taxes high or low revenues = low profits Limited access – barriers to entry through regulations Short term focus on maximising GDP and shareholder values - What compounds this - Protectionist policies – fight against creative destruction Example - The invention of electricity – a much bigger event in our human history than the internet – People were freaking out seeing Tesla use his body as a conductive material to power a light bulb It also created unrest in labour markets – the reason why we don’t see the leary’s dancing in the street going from gas lamp to gas lamp (like Mary Poppins) – they were made redundant Think about it – 100% of our jobs today are vastly different to the past – almost all don’t exist, but those that do are very different looking – unless your job is to dress up like a historical recreation Theory – if an economy is weak, you must help protect it through subsidies or benefits These elements together just add to stagnation of the economy Summary – low growth trap requires innovation – attracting the best and brightest Sadly – innovation is stagnated when so are the individuals who would otherwise be innovating – through the choice Why do you think Communist/socialists countries crumble in every case – hard to innovate on a new engine you are working on when you are moved to a collectivised farm and given one farm animal to plough fields with – but you have to eat it as you don’t know anything about farming – Next episode will dive deeper into the concept of an inflation trap – and policies to get out of it Thanks for listening, if you want to get in contact, you can do so here.
Welcome to Finance and Fury A plan for structural reforms to help increase Australians’ ability for upward mobility. The coalition will likely have enough seats to squeeze through a lot of reforms. Today: Income axes going up aren’t much of a concern What about the taxes you don’t see directly? The effect of these taxes on the economy growth or decline How to reduce your taxable incomes? Taxes – Government revenue source Number of taxes – do you know how may taxes you pay each year? The average Australians pay at least 125 different taxes each year, 99 to Federal, 25 to State and 1 to Local Total tax collected is approximately $528.5 Bn Most tax comes from incomes of individuals and businesses – 59% or $312 Bn Consumption tax like GST makes up 26.8% was supposed to replace state’s stamp duty Business payroll tax makes up 4.7% or $24.7 Bn charged to companies if they have above a threshold employees/wages Excises on specific goods – normally ones on top of GST at Government discretion Sin taxes – consumption tax on goods which are harmful to society Alcohol – the social cost from loss of labour, healthcare, accidents and crime costs Tobacco – the effects of smoking are estimated to cost $320 million but the revenue raised is $12 Bn Does the additional money go back in to addiction treatment programs to help? Or the general spending budget? Consumption vs Income Taxes Both can’t be kept high If consumption tax increases the cost of living, income tax should be lower Consuming becomes more costly with consumption tax, putting a strain on upwards wealth mobility Statistics on Taxpayers Individuals and income tax reduction plan for 2022 and 2024 Helping reduce the burden GST placed onto families from 2001 onwards Original plan to protect works from bracket creeps With wage growth and inflation going up, if the marginal tax brackets don’t increase too you get bracket creeps Abolishing the entire tax bracket 90k – 180k incentivises hard work Despite these changes you will still see the top 5% of workers paying a 3rd of all income tax collected Someone earning $200,000 pays 10 times more tax than someone earning $45,000 per year How to reduce certain types of tax? GST? Stop spending so much. Further excises on your spending only reduce with less spending Income tax? Deductions or salary sacrifice Salary sacrifice puts money into super up to $25,000 cap taxed at 15% rather than marginal tax rate Deductions give back the costs of investments or work related expenses and donations to reduce your assessable income Give to charity – Donate to my CEO Sleepout https://www.ceosleepout.org.au/fundraisers/louisstrange/brisbane Negative gearing when you spend more on investments than you earn Borrow to invest – home equity Get your marginal tax rate back and for a lot of people the amount back will decline from 2024 Lower marginal tax rates for those earning between $40k-$200k Franking credits – Shares Tax offsets on dividend income Buy fully franked dividend yielding shares, but gets added to gross income Own 1,000 CBA shares. They pay $4.30 per share in dividend so you get $4,300 of income. Plus the franking credit, of $1,843 so total income is $6,143 Earning a salary of 100k, assessed at 39% the tax would be $2,396 minus the franking credit of $1,843 so net tax is now $523. Therefore, the marginal tax rate is now 13% instead of 39% But, you will simply pay no tax on dividends if your assessable income is all the way up to 200k, as franking credits offset tax on franked income with a 30% tax rate Family trusts – No changes to distribution rules Still allows flexibility and asset protection Own assets and distribute income to the lower marginal tax rate individual Capital Gains/Losses Gains still get the discount for assets owned longer than 12 months Losses, claim against future gains If you enjoyed this episode leave a rating, if you want to get in contact you can do so here. Resources: Individuals taxation statistics - https://data.gov.au/data/dataset/taxation-statistics-2016-17/resource/4161d1b8-f9e3-4f36-b21d-d5d06b43ed2e Australian taxes - http://taxreview.treasury.gov.au/content/paper.aspx?doc=html/publications/papers/report/section_2-03.htm
Welcome to Finance and Fury There is a saying that goes hoping for the best but planning for the worst. With the election around the corner, for those wanting to make it for themselves and create financial security may be in for a bit of a shake up Today I want to recap proposed policies, breakdown of the economy and strategies to avoid pitfalls from election results. Recap of policies: Minimum wages and penalty rates reintroduction has an impact on small business sector Taxes has one of the biggest effects Income tax – more tax from the average income tax payer Capital gains – reducing the discount to 25% from 50% impacts risk/return ratio for those investing in capital growth investments Negative gearing – only on new properties impacts investing decisions Family trusts – higher tax on distributions at minimum of 30% rather than the beneficiaries marginal tax rate Franking credits – still in place, but the rebates will go. This still helps to offset tax, but lower incomes for self-funded retirees State of the economy Retail and hospitality – restoring penalty rates will force small business to cut staff or go out of business Australian Retail Association – competing with online retailers means lower profit margins Higher wages – leads to costs of running a business and administration bankruptcy Why you see surcharges on holidays or reduced hours Retailers and hospitality going out of business, retail employs 10% and hospitality 8% of the working population Business – they just want stability Frequent PM changes are bad for consumer spending and confidence Fears of looming uncertainty increase the longing for political continuity and stability Market Focus showed 77% of small businesses expect to be adversely affected by the results of the federal election What do you do if you think something bad will occur? Taxpayers – Bill Shorten uses “top end of town” to defend additional tax on income earners, investors and self-funded retirees 10% of taxpayers to pay $32 billion more 400,000 voters earning more than $180,000 a year Policy suite will hit medium to high income earners Individuals – reversing $285 billion in tax cuts proposed by the Morrison government will deliver $13.6 billion extra revenue by 2022 1 million workers earning more than $120,000 paying 45% of Australia’s tax Earners of more than $90,000 a year MTR 5% higher by 2022 This group accounts for 88% of net income paid already and 52% of Australians don’t pay any net tax Inequality won’t change – Gini index – Labor’s is 0.36, and Coalition is 0.37 5% of taxpayers will pay 30% on superannuation contributions rather than 15% like the rest of Australia Family trusts – tax on distributions goes to 30% is the next part of Labor’s plans to redistribute wealth ABS says 93.2% of the value of trusts is held by the wealthiest 20% of households Holding wealth isn’t the only thing Family trusts are used for 1 million family trusts in Australian, 250,000 small businesses operate using trusts Used to distribute income to beneficiaries and asset protection What about big business? They will make up 5% of the extra tax from $32 billion of increased tax over 4 years Small businesses will feel the squeeze further, impossible to compete with higher wages and higher tax Plus additional regulation costs, $25k of licensing costs is a lot for small business The issues: Low growth economy leads to an underperforming share market People’s perception has a lot to do with marker performance RBA slashed its forecasts for economic growth as subdued household income and real estate price corrections Weakening household consumption is a key risk to the economy RBA slashes the GDP growth forecast for the year to June to 1.7% from 3.25% just 6 months ago Our exports are mostly owned by foreign companies, so it doesn’t help the economy very much Lower disposable incomes for a few million Australians Household consumption is forecasted to grow at nearly 2% this year, and it represents nearly 60% of the economy Investment in building new homes is expected to be down 6.7% this year, and construction accounts for nearly 10% of jobs. It is expected to create more job losses. Where to invest? Salary sacrifice becomes more attractive if taxes increase and investing for the future Can bolster your retirement savings, save more in tax on investments too You won’t be able to access funds until the preservation age of 60 An investment strategy can be passive and are long term holds Risk reward will go down but doesn’t matter if less than 12 months Midterm sell strategies may not be worth it Unit trusts may be an option to replace family trusts but aren’t an exact replacement Still provides asset protection and won’t attract the same 30% minimum tax Won’t have the flexibility of distributions as units are fixed to members Types of Assets This is all speculative International shares and looking for growing markets Countries like Indonesia, India, China, Thailand USA country direction, the largest companies in the world Brazil and Bolsonaro is turning the country around after his recent election Australian Shares avoiding retail and property and some near future pain and slow market growth Property only new properties can get negatively geared, and prices bottoming out in a lot of major cities I will do a full breakdown of each of these after the election: One on the property market – apartments and houses and their locations One on the share market compared to other markets And one on the state of the economy Thank you for listening, if you want to get in touch you can do so here.
Welcome to the Complexity Premia podcast from Coolabah Capital, which is hosted by Christopher Joye, CIO and portfolio manager of Coolabah Capital, and Ying Yi Ann Cheng, a portfolio management director. The Complexity Premia podcast strives to deconstruct modern investment problems for wholesale (not retail) participants in capital markets. In this episode we will: discuss the huge credit rally; make the case that the housing bust could be about to end; reveal that the RBA is considering unconventional monetary policy; argue (again) that ScoMo has a much better chance of winning the election than betting markets and political experts think; canvass rising RMBS risks as house prices plunge; explain why the Senate will probably kill the ALP’s franking policy as it stands; and consider Magellan’s entry into the simmering LIC debate. This information is suitable for wholesale investors only and has been produced by Coolabah Capital Institutional Investments Pty Ltd ACN 605806059, which holds Australian Financial Services Licence No. 482238 (CCII). The views expressed in this recording represent the personal opinions of the speakers and do not represent the view of any other party. The information does not take into account the particular investment objectives or financial situation of any potential listener. It does not constitute, and should not be relied on as, financial or investment advice or recommendations (expressed or implied) and it should not be used as an invitation to take up any investments or investment services. Whilst we believe that the information discussed in the podcast is correct, no warranty or representation is given to this effect, and listeners should not rely on this information when making any decisions. No responsibility can be accepted by CCII to any end users for any action taken on the basis of this information. No investment decision or activity should be undertaken without first seeking qualified and professional advice. CCII may have a financial interest in any assets discussed during the podcast. Listeners in Australia are encouraged to visit ASIC's MoneySmart website to obtain information regarding financial advice and investments.
In this Episode, Chris and Alex are joined by Paul Moran to talk about the Federal Budget handed down on the 2nd of April by the treasurer Josh Frydenberg. This is a discussion and not simply just stating the changes in the tax brackets so tune in for some more philosophical analysis and some light hearted fireside chat. If you are interested in talking to either Chris or Alex then please get in touch with us through social media or by visiting our website, www.moranfp.com.au
In our latest episode, we discuss strategies to consider to counteract labours Franking Credit Policy. Hosted by : SMSF Specialist Advisor, Director of Business Concepts... Go to Podcast
Religious anti-discrimination exemptions- interview with Dr Luke Beck, Bishop Robert Forsythe and Dr Renee Barker from ABC radio National's God Forbid program. Franking credits, Australia's educational apartheid.Great State School of the Week- Jinibara Primary School, Burpengary QLD
Welcome to Finance & Fury, the ‘Say What Wednesday’ edition. This week’s question comes from Gab; “Hi Louis, I was looking at different asset classes and how someone could get exposure to them (outside superannuation) and got stuck on "fixed income". If I understand this asset class correctly, if you hold to maturity you get all the capital back. But if you buy ETFs or managed funds you lose this benefit (as you basically just get exposure to the secondary market). Also, I thought the fees were ridiculous, especially with active managers charging 0.5%, when the long-term return is 5-6%. What are your thoughts on this? Thanks, Gab (keep up the good work!)" Hi Gab, Great question! Today we’ll focus on explaining Fixed Interest in straightforward terms; What are Bonds, why do they exist, and how do they work? Price, ‘Face Value’ and coupon rate Buying and selling bonds The effects of interest rates on the value of bonds Bond managers – Managed funds or ETFs The role of Bond Managers Costs compared to returns Index bonds Active managers Why buy bonds or other fixed interest assets? Downside protection Higher yield than cash Middle ground to cash The risks and disadvantages Ratings system Maturity Duration Interest rate movements What I look for when buying bonds Franking credits on coupons If you have a question, or want us to cover something else in more depth, let us know at the contact page https://financeandfury.com.au/contact/. Thanks again for listening guys. Until next time!
00:02:15 LNP exit update00:07:06 *Scullion's deadly retirement (audio)00:08:20 Franking credit cash giveaway grabs the nation; have the Libs outsmarted themselves?00:28:33 Taxes Are Always Bad - Scammo's economic Common Sense00:29:03 *Scammo's "Economics 101" (audio)00:36:15 Banking RC report handed down; misbehaviour to be punished so sternly bank shares skyrocket00:43:08 AvH ASIO stopping women fleeing Saudi Arabia00:43:21 AvH Australia sets up Hakeem00:44:45 AvH "kids off Nauru"; medical transfer legislation00:48:17 *Scummo's "indigenous voice" requirements (audio)00:54:01 *KAK's racist whatabouttery (audio)
Jocelyn Airth reads the news headlines for February 4. See acast.com/privacy for privacy and opt-out information.
Earlier this year, Labor floated a plan to cut cash refunds for franking credits. The policy has been met with considerable backlash in the accounting community, and a federal government inquiry is now underway to investigate the real-world impact. In this episode of Accountants Daily Insider, host Katarina Taurian is joined by Member for Goldstein Tim Wilson who is leading this inquiry. Tim will share why he believes the policy will fail to deliver the desired outcome, the huge financial impact that it could have on retirees, and whether there are suggestions that this will lead to diversification of assets for many as a means of minimising the overall impact on their pocket. Tim will unpack how they plan to report on the inquiry, what will likely occur as a result of their findings, and how individuals can have their say on the proposal and get their thoughts and concerns heard.
Franking credits. What are they? How do they work? Nick Bruining has all the answers in this week's episode of the Don't Panic! Money Show.
In this episode Nathan and Glenn discuss Labor's proposal to remove the refund of excess franking credits. Who will it impact and what can you do.
Stamp Show Here Today - Postage stamp news, collecting and information
Welcome to Stamp Show Here Today Episode #188 - Today we will be discussing womens right to vote, Franking, and President Trump taking on postal rates. Also a follow up on the Canada e-commerce contest, other postal related news, upcoming shows, new issues and a Hot Wheels release update.
Welcome to Say What Wednesdays – Where we answer your personal finance questions each week. Two questions this week from Chris: No 1 what are your thoughts on investing through a platform such as acorns? In your opinion do you see it as reliable and a worthwhile investment option? Furthermore, with such platforms would you say that there is a degree of double fees being taken out (platform fees and ETF fees for underlying investments e.g. ASX ETF's) which erode earnings? No 2 What is the best way for people on a low income (around $25,000 p.a.), such as students and job seekers to start building a growth portfolio? Platforms What are they? – Ways to hold all of your investments in one place Types – three types Raiz (Acorns) – Investment application (app) Allows for micro investing – automatic investments Limited choice of options – Growth Option, etc Investment Platforms are a bit different Allows for accessing managed funds, shares at wholesale level Range of choices of funds Broking platforms Direct shares mostly Costs – Admin fees Raiz – 0.275% p.a. Investment platforms - platform fees generally higher Flat fees - $175 to $600 p.a. Percentages - 0.4% to 0.1% Broking platforms Transactional costs when you buy/sell investments Benefits Raiz Nice, simple easy way to start Automatic savings takes away the hands-on approach Passive Platforms You can have actively managed funds Specialist Managed funds in certain sectors I have an account – Buy small cap, micro-cap, international, emerging market fund etc. Wouldn’t really get that much in the way of large cap here, as that is ETF Small cap – 25% p.a. for the past 8 years Worth it if you know how to use it right For ETFs, shares, Large cap, probably not worth it. They do consolidated tax statements for you (that's what the admin fees are for) Don’t have to meet minimums on fund purchases - $25k to $500k Broking Benefits – no ongoing holding costs Can buy the same ETF in RAIZ in broking platforms, for broking costs Upfront costs may be higher, but no ongoing. In my opinion, if you are starting out, probably better to start somewhere than not start at all Especially if you aren’t familiar with investments or good at saving, may as well go with app to do it for you. Better to start with something then never start. Broking platforms – Can have large upfront costs Investment platforms are good, if you have enough to justify it But only if you use the specialist funds that you have access to – geared, emerging markets, micro-cap, etc. To answer Chris’s second question There are two options for students Hands on/personally invest Focus on Franking credits, or high growth long term – You will get more back in income than what you would pay in tax Need low transaction costs and diversified – Good Fully Franked LICs or ETFs are an easy place to start Super co-contributions – free money $1,000 (post tax) = $1500 investment Comparison over 3 years at university, while earning below $37k p.a It’s a boring answer for long term benefits – superannuation as an investment vehicle! Each year you put $1,000 into super, or $1,000 into the same investments personally. Who wins? Either way you put $3,000 towards investments In super you get an extra $1,500 (or 50% return) straight away! By the time you access it, say 40 years, earning 8% p.a. (4% income, 4% growth) Personally, after you get taxed on the income at say 34.5% = $37,031 Super gets taxed at 15% = $72,965 Awesome questions Chris! I hope I covered off on it all. Next Say What Wednesday we’ll answer a question from Emma Send in your questions and feedback! https://financeandfury.com.au/contact/
Welcome to Finance & Fury! Today we're talking about increasing your net income …and the way to do that is reducing tax. So, in today's episode we'll run through why we pay tax, where it goes and I'll break down all of those dirty little “loopholes” that you’re hearing about, how the super wealthy tax dodge every single year, how they pay no tax…well, guess what! you're all entitled to do the exact same thing if you're in a similar position. So, to take us into it, Mr. Fury… Enough is enough! I've had it with my personal finances being all over the damn place! Everybody strap in…It's time for Finance & Fury. Before jumping into all the amazing tax dodges, I want to talk about monopoly again because there's a part of that that I really, really, enjoy and it's the fact that every single turn being forced to pay other players based around how many properties you have, is purely chance. Imagine that this specific card in monopoly where you draw it, and every home that you own, you have to pay other players twenty-five dollars for that. Well, imagine that it was guaranteed in monopoly every single turn rather than just based around picking up one random card, I worked up that from this card you’re paying around 20% of tax, where the average cost of a house in the game is around $125 - so that ranges from $50 to $200. And if you're paying $25 on that average, it's 20% of tax and it's actually a really rare event to actually get that card because you're more likely to land in jail. Everyone's played Monopoly I'm sure. Imagined that this was a guaranteed outcome every single turn, how would you play? Would you go hard trying to get as many properties as you can, accumulate as many homes on them, or would you sit back and wait for your payments from other players? And taxes (beyond being a certainty compared with death) really, it's money that you pay to the government to spend, which in a lot of cases does just go to other players. The sources of tax in Australia you've got your income tax (which is based around marginal tax rates on what individuals earn) and that can range from 0% to 47% with the Medicare levy. That's also paid on capital gains tax and then you've got other taxes like sales tax (which is the GST on all goods and services produced), you've got state taxes as well, such as payroll, stamp duty tax, and at the federal level as well you've got company tax rates. So why do we pay tax? Well you go to jail if you don’t. But beyond that it goes to help run the country with all the operations and services that the government provides. In the latest budget it was estimated that a spend of $464 billion’s anticipated for the financial year. The tax revenue for the year was $433 billion. So, there's around a $31 billion or so deficit there. Of that spend of $464 billion around 16% of that goes to healthcare, 7% goes to education, 4% goes back to paying interest on debt that's accumulated, because if there's a shortfall in spending (such as that $31 billion in that previous example) the funds are borrowed and then that interest has to be repaid as well. And that comes from our taxes. But when you go to the overall spending picture 35% is spent on transfer payments to other people. That's a form of social welfare where it's actually decreased from just shy of around 40% over the past two years down to 35%, so, it's a good step in the right direction. However, it's still $430 million every day and the Australian tax policy, it's designed to be what's called “progressive” where the higher that you earn in assessable income, the more tax you have to pay at a %age. And there's a massive debate between politicians and economists over the role of tax policy in affecting the economy, where it can help mitigate or exacerbate wealth inequality. And, it also has effects on economic growth. And it comes back to the question of the “progressive” policy designed to be fair, but does it create fairness and equality? I looked up the definitions. The definition for fair is treating people equally without favoritism or discrimination. The definition for equality is the state of being equal especially in rights, status, and opportunity. And everything's equal when there's a uniform application or effect without discrimination on any grounds. Based on that definition it sounds like it's talking about equality of opportunity, where everyone has the same opportunity, while not being in the same position, but we're all granted the same rights and the same ability to do what others are as well. What the progressive policy is focusing on is equality of outcome, which is a massive difference to an equality of opportunity. Where the equality of outcome simply means that the more that someone else has, it has to be taken away to give to someone else to have, so everyone can have the same outcome. And unfortunately, with that policy of equality of outcome, the more equality is actually pushed for, the less equality is actually provided to people when you take the dictionary definitions (where it's privileging some people over others - if you earn a high income you're less privileged). And it's measured in Australia by a thing called the Gini coefficient (well, it's actually measured worldwide by the Gini coefficient) and it's a number between 0 to 1. If you have a number of zero in a country that's got this thing called the Gini coefficient, it means that everyone's equal, everyone's earning the exact same amount regardless of how much they work, it's just completely everyone’s on the same, say $10,000 per annum. If it’s a Gini coefficient of 1, it means that one person or just a couple have all the wealth and income in the economy. In Australia our Gini coefficient, before taxes and transfers, is about 0.47 and after tax and transfers it goes down to about 0.33 or so. So, 0.33 is actually a very equal Gene coefficient when you compare it to most other nations. It ranges all the way up to around .62 for South Africa. But again, after transfer payments it comes down to around 0.45. And when we're looking at the definition of fair, again, in Australia today who’s doing their fair share? Going through the numbers …people who are of the working age of 18 to 65, it can be broken down into ten lots of 10%. And looking at those numbers, the top 10% of taxpayers pick up 52% of the income tax bill. The next 10% pick up 19%, then the next 10% pick up 13%. So, the fair share there of tax distributions comes from 30% of people who are working age between 18 and 65. That 30% picks up 84% of the bill. And if you earn $120,000 per annum, or $500,000, or however much - if you think about tax as something you don't get to keep, technically then you're working for someone else. Where if you're earning $120,000 per annum, if your average working year is 240 days, at 48 weeks, five days per week, you're working around 70 days of that 240 for something else. And if you earn more (say $500,000) you're working around 100 days of every year of your 240 days for something else - where your money is just going away. And the definition of slavery is working for someone else with no choice, and I'm a bit torn, where the fairness model here doesn't seem that fair. There is an article from The Australian that was talking about the government budget and the figures, but here it's actually just focusing on the government itself and what the government costs in running. The ATO, the individuals responsible for collecting the money, that costs $3.5 billion each year. And they employ 20,000 staff to collect the tax revenue. That's $163,000 per employee that it costs (that's not what they get paid, it's just simply what it cost to run per employee). To give an example, in the U.S. the IRS (their tax division of, I guess you'd call them the American ATO) you’ve got one bureaucrat for every 2,000 working age people to collect tax. Here, we have one in 500. Moving down the list, the Department of Social Services (the individuals responsible for the transfer payments) they spend $5.5 billion every year just on administration costs. And breaking that down to number employees, it's an average cost of $160,000 per employee. Federal Department of Health, 4,500 employees costing $222,000 each. The Department of Foreign Affairs, 7,000 employees costing a whopping $240,000 dollars each (I guess it's fairly expensive to go on overseas holidays every year!). When you break down the fact that all of these costs are not actually producing anything, it's been going into a system to try to transfer the payments. And the total bill for the government running itself (just on costs) is just shy of $60 billion. So, it comes to about 16% of our revenue is just going into the system of running it. And the big problem with higher taxes is that it's never actually been proven to lift productivity, or enhance prosperity, where every dollar that’s taken out of your pocket is one less that you have to spend. And if you think every dollar that's taken out of your pocket, straightaway 16% gone on collecting the revenue and redistributing it, well that's a pretty awful loss when you're giving a dollar. And if you're investing, you wouldn’t want to invest or give a dollar, just to lose 16%. And there's always the guise of a conversation on tax reforms, really just being a discussion for tax hikes because over time the message of reliance is increased to the point where it’s simply funding the government's own growth. It hasn't been a measurable increase in products or services that the population gets for this increase of tax. When you compare it to times in history, a big fan of ancient Rome where the average tax rate was 1% to 3%. And 3% was a big outlier in the peak of the empire, which was just in major war times. And if you weren't a citizen you didn't have to pay tax, it’s only if you're a citizen you paid your tax, if you weren't a citizen you didn't have to because you didn't get too many rights if you’re a non-citizen in Rome. What happened to society and just kids helping parents out? Oh, wait... ok you don't have much money left to pay tax so it's fairly hard. And now we’re in a position of a lot of our money going to a system that's meant to take care of people, when if we had more money we could take care of each other. So, remember, it's up to you. Now, what can you do for your situation? Because, rather than a ‘reliance message’, getting an ‘independence message’ is really the first step when thinking about reducing your tax. And it's all about financial independence after all and that comes with the independence message. Love him or hate him Kerry Packer has a fantastic quote about minimising tax when he got dragged in front of the Senate inquiry about the print media. His quote, when asked about minimising tax was. “I'm not evading tax in any way shape or form. Now, of course, I'm minimising my tax… and if anyone in this country doesn't minimise their tax, they want their heads read, because as a government I can tell you you’re not spending it that well that we should be donating extra”. So, what can you do to reduce your tax? Simple. All the secrets of the rich are here. You can either just earn less – so, stop working – and you won't pay much in tax. Or if you don't want that option, we’ll go through 8 ways to actually legally minimise your tax. And that's by reducing what you're assessed on. So, rather than just not earning an income you can earn an income, just try to reduce the assessable amount… and one way is the old ‘negative gearing’. Everyone hears about negative gearing, it’s and simply spending more on investment than what you earn. If you borrow to invest, say borrow home equity and buy some shares, the interest payments there, if they’re higher than the income that you generate from those shares. Say you buy $100,000 worth of some mining shares that don’t pay much income, maybe 3% of dividend yields, compared to interest payments of 4.5% we've got a negatively geared investment because you're putting money into that, and the tax you get back is only as good as your marginal tax rate. And same with property - if you're paying interest on property and you've got ongoing cost management, for every dollar that you're net losing on that investment, you get to claim the marginal tax rate back. So, for a property if you're earning an income of $20,000 in rent, but it's costing $30,000 per annum, and you're on $100,000, well you're only getting 39 cents back for every dollar that you spend on that investment. So, that's negative gearing and unfortunately, it's not the best for a cash flow position because it actually reduces your after-tax cash flow quite a bit. Even after the tax deduction’s given back. The second easy tax dodge is ‘deductions’. Similar to the negative gearing example, any investment costs that you have are claimable as tax deductions as long as they're going towards some asset that's generating an income. Other deductions are work-related expenses. If you've got some, even education, to improve your current role or job, then you can claim that generally as work-related expenses either through just operating or as educational purposes. Another great way, is give to charity. If you give money to charity that's a complete deduction against your assessable income. Another great way, the third way, is buying shares with franking credits. Franking credits are the tax offset on dividend income. When you buy a share that has a fully franked dividend against it, you're essentially getting back the tax that the company’s paid at the company level to avoid double taxation. If you get a fully franked dividend though, the franking credit actually gets added to your assessable income. So, an example of that - if you have, say 1,000 Commonwealth Bank shares, each Commonwealth Bank share pays $4.30. Of that, you get $4,300 of dividend. So, I've got your 1,000 Commonwealth Bank shares each paying $4.30, you get $4,300 per annum. Attached to this is franking credits of around $1,843. What you get taxed on is the dividend, plus the franking credit. If you're earning $100,000 again, the total tax that you'll have to pay is adding those two together so it comes to around $6,143 you're going to be assessed on now rather than just, you know, the $4,300 that you got in income… and you’ll pay tax at 39% on that. So, after the tax is paid - which is around $2,393 on that, you actually then get the franking credit back. So, the net tax on that is $523. So, you've received $4,300 of income after all the mucking around with the frank credit calculations, you’ll pay $523 net. That actually works out to be a marginal tax rate of around 13% on the dividend, rather than 39% so franking credits provide a very tax effective income. The next, is family trusts. Family trusts just own an asset on your behalf, or the behalf beneficiaries, inside a separate environment. Rather than owning assets in your own personal name where you’re, every year, obliged to pay at your own marginal tax rate, family trusts allow assets to be owned inside the trust and depending on who the beneficiaries are, every year that income can be distributed to someone with a lower marginal tax rate. You can't distribute your personal income though, it has to be an investment. So if you're buying investments inside a family trust and they're generating say $20,000 - $30,000 of income per annum, if someone's on a very low marginal tax rate in the family, then you could distribute that income to them. However - kids – they’re no longer a loophole. If you’re below 18 it’s about $460 you can give to a kid tax free. Then, for the next up to $1,300 or so, it’s 66% of tax, and then above that, it's 47% Then, salary sacrifice. You can actually put money into super pre-tax paying 15% of a contribution tax, rather than your marginal tax rates. And if it's sitting inside super as well, it pays a maximum 15% tax again, rather than having an investment in your own name paying marginal tax rates. If you earn $100,000 and you put $100 into super, sit back for 20 years, you'll likely have an additional $180,000 - $200,000. And that's at 6.40% return. And you would have saved around $25,000 of tax over that time. Your net benefit is around $200,000 over that period - all for just $60 less per week in your hand. Just remember with salary sacrifice don't let your employer contributions and salary sacrifice go over $25,000 because otherwise, tax! Another great tax dodge …capital losses! Just lose some money on an investment. Then you can claim future gains against that. If you buy shares for $100,000 of value and lose 50%, and you dump it and sell, you've got a capital loss of $50,000 that you can carry forward every year until you gain a capital gain and then you can help offset that. So, with Donald Trump not paying tax forever apparently, well, you too can do that if you just lose $916 million so you can essentially, indefinitely, offset any capital gains you get. And that's where the next strategy comes in if you are selling some asset with capital gains…try to time it so that you're doing so in a year that you don't have much of an additional assessable income. A great way to do that (probably way too down the track for most of us) but waiting to retirement, or waiting until maternity leave, or just waiting until you're in a position where you're outside of your normal assessable income to sell those assets. Because capital gains get added to your assessable income. So, if you're generally working for $80,000 a year and you sell an asset (even if it's had a $100,000 gain) $100,000 is just added against your assessable income. If you could wait an additional couple of years, if you're on maternity leave or if you're simply approaching retirement, then you can sell that asset and not have to pay the additional tax being added to your assessable income. And, last but not least, superannuation and allocated pensions. Allocated pensions have come under a lot of attack recently and can so I can sort of tell why when, if you're above the age of 60 or your preservation age, you could convert your super account into what's called an allocated pension or income stream. They've got many different names, but it's all the same thing, where you can transition your super account into a tax-free account. So, all the investments inside there can be tax free. You can have a property inside an SMSF, you could have a $20 million gain. You could sell that while you don't pay tax (if you're in the pension environment). Similar to all of the franking credits and other income that you receive in that environment, it just gets added to your income rather than paying tax. So, it's really the most tax effective way of funding retirement, of just building that up, and then hopefully locking it away to the point the government doesn't keep just grabbing tax off it. And all these 8 different strategies to reduced taxes is really true equality. Anyone can do it. You all have 100% equal access. But, it just doesn't make sense for a lot of people to do these because they're not in a position where the costs involved in setting up, say a family trust, is worth the tax saving they would get. Because if you're not paying much in tax then setting up all these structures which cost a lot of money, doesn't actually save you any net benefit. You might save some tax, but you're paying probably more than what it's saving. Well, I hope these have helped – where if you're paying tax that's a guaranteed certainty every year, why not just try to improve your position a little bit. Increase your net cash flow by looking at ways to just simply reduce your tax. The most common for those ones we looked at, the major 8; negative gearing, salary sacrifice, claiming deductions, getting franking credits with shares, family trust, looking at capital losses… So, if you can use these as well - that's true equality. It's just you probably haven't lost a billion dollars so you can't claim that as a tax loss indefinitely …and really when we look at tax, does the government deserve more money that is really not increasing the quality of service we receive? and we don't know really how it's spent, we get a chunk of a pie graph, saying “34% went here” and if you try to look into really how it's being spent or what's being divvied up, it's very hard to find. It's possible to really make the government accountable by that point, and if they're asking for more, I think they should be fairly accountable to at least let us know where it's going. Because we're never ending source for them - they can legislate anything really, and unfortunately, they have the guns… so we have to abide …or go to jail. So, if there's going to be the message of trying to accept more of our taxable income, then it's probably a good idea that we give a message back of just needing to be fiscally responsible first, before asking for more money. It's like a kid who doesn't want to work on their own and just keeps putting the hand out say more, more, more, more, more. Eventually one of the parents might give that to them, but then over time if they just keep handing out money, they going to go bankrupt. So, I hope you enjoyed the episode today …and I'll see next time.
This week we get a little more political as we discuss Bill Shorten and Labor's plan to cancel the refund of franking credits. We go into detail about how the franking credits or dividend imputation system works here in Australia and who are the people who will be most affected by the change. We even have our suggestions on what could be done to improve this policy, if it has to get enacted. If you listen closely you may also pick up on a strategy or two to help find the loophole in this policy. you can get in touch with us here @AlexHont & @PlanWealth
Welcome to ‘Say What Wednesdays’, this ‘Say What Wednesday’ is brought to you by Adam and Tate, they both asked separate questions about the Franking credit issues and just to help clarify around that because Labor's announced some proposed changes to the Individuals Wealth Policies, one of them includes a thing called, Changes to Franking Credits. This system for Franking credits was set up so individuals weren't taxed twice on any dividends that they received from companies that they owned. The other individual polices that Labor have introduced, or want to introduce, are to lower the income threshold for superannuation tax rates for contributions so, they want - if you're earning greater than $200,000 you are going to have to pay 30% on contributions to Super. They want to limit 0.5% increase to the Medicare levy for people earning over $87,000, lifting the top marginal tax rates by 2%, scrapping the first homeowners super savings scheme, restricting negative gearing for properties, halving capital gains tax discounts to 25%, removing refunds for the dividend imputation credits, which are the Franking credits, lowering non-concessional contributions to Super from $100,000 currently to $75,000 and remember a few years ago, $150,000. A few years before that it was unlimited, and they want to dump the ability to make - catch up contributions for any individuals with low superannuation balances and they want to remove the ability for anyone to make personal tax-deductible contributions. So, it's very much an attack on superannuation and those on the higher marginal tax rates but Franking credits is one that's actually going to affect everyone because if you buy a share in a company you technically own that company then that company makes money, they pay tax on the money they make and then they have some profits. With those profits they have two uses, they can either reinvest that money in themselves so they can purchase new stock or they can expand their business operations, hire new people or they can pay dividends, the profits, out to investors - all those who are in the shares in the business and the Franking credits were introduced to avoid the company paying tax and then paying profits out to the individual and them paying taxes as well. Because, say a company has a $100 revenue, they pay their company tax rate of 30% they're left with now $70 of profit. If they choose to pay the full amount of profit, that's $70 out to an individual, if they're on the highest marginal tax rate that $70 is 35 to that individual. So, what was $100 is really now being taxed at 65% that the government's taken and the individual is left with 35, so that's what Franking credits were introduced to avoid but with the removal of that there's two separate issues, which are actually dragging each other into different directions, where it's actually bad for all retirees and it's actually bad for poor people as well. Where if retirees are in a situation where they're drawing income from shares whether that be superannuation or personally they're going to lose a lot of their net incomes because their either are going to have to pay more tax or they're not getting those Franking credits in cash back. And anyone who's on low marginal tax rates as well, they don't have any other investment income to offset their dividend incomes, they’re just going to be losing their Franking credits and increasing their effective tax rates from around zero to 30%. So, it's a big change that really has many - many losers and a very finite number of winners …and when looking at the winners you can sort of tell who's driving this policy. So, the losers - anyone who's invested in shares. That can be broken down, even Australian fund managers (people who professionally invest in shares for a living) they pass the Franking credits on to investors and that's a big incentive for people to buy Australian share funds. Also, the second biggest losers will be anyone who has a self-managed super fund or an individual wrap superannuation account where they receive Franking credits. You don't have to be a millionaire to have these, you can have a super balance with one hundred thousand and access direct Franking credits as an additional income to you. But it's being targeted as just, again, lies. Of just painting that the wealthy are the only ones benefiting off this. But retirees are really, and actually those on low marginal tax rates, are going to be the hardest hit because anyone who's done an accounting 101 course knows that if you receive a dividend of say $100, you're going to be assessed as owning an income of the dividend plus the Franking credit. So, what you're really getting taxed on $142 anyway and then you get $42 back, so it's not like these Franking credits for the ultra-wealthy are just, you know “free money”, it reduces their tax a bit, but they still pay a lot of tax. The individuals not on high marginal tax rates, they're the ones really benefiting from this, and it seems like it's just disincentive anyone to really take the necessary steps to build their own wealth. Because when you look at the winners from this, the real winners from this are the industry funds because industry funds don't pass on those Franking credits to investors, they keep them and help to subsidize their own costs and taxes in the background. Then another major benefit or winner from this policy is any property trusts or utility trusts or property investments because property trusts, they don't really pay much in tax. You don't pay much in taxes a company or a trust you can't really claim Franking credit if you haven't paid tax, so therefore they pay a lot of the distributions or incomes and dividends out as unfranked dividends because they haven't paid tax, or they can't pass it on. It's only going to be hurting the companies who are actually paying tax and then the investors who have invested in them. So, the net effect of this it might be actually pretty similar to what we see globally with countries that don't have Franking credits, where companies do not pay much in dividend. You look at the average ASX listed company where the ASX overall has an average yield of 4.4% excluding that Franking credit. With a yield (say you buy the ASX300 share index), your yield will be around 4.4%. If you buy the U.S. index your yield will be 1.8%. So, it's less than half… and why? It's because the US doesn't get Franking credits. So, going back to what a company can do with it (profits) they can pay you, or reinvest in themselves. They pay you and you're going to just get double tax - no tax benefit back to you from what the tax the companies paid. Then it's not very much of an incentive to buy the share purely for income, which in Australia it really is. So, these companies might actually change their decisions on dividend policy and stop paying as much dividend and just decide to reinvest it in themselves. And shares are a big part of retirees or anyone's income source for passive income because property itself it doesn't actually give the best passive income when it's got debt against it and it's got additional cost because if you're looking for in retirement for big net cash inflow, and you have to own property personally and it's got additional running costs, agent fees, insurance, rates, you're looking at a fairly low yield compared to a share after all the tax and Franking credits are rebated. So, this policy is really just punishing everyone to pay more in tax because anyone who has superannuation has Australian shares, industry funds have already been not passing this on so hey in anyone in an industry fund, you're not worse off. But anyone who actually has their own individual superannuation account like a wrap account which really anyone can get - it's not like a self-managed fund where you've got to pay thousands of dollars to have it set up - they're going to be missing out too. And all it is is just to grab more tax, pay more tax, so it's punishing people for doing the right thing and investing in their own lives to look after themselves in the future. It's just punishing them, and why? Well, the government obviously needs to feed themselves, create more money that they get which reduces the money that you get, which then creates more reliance them. But it's so counterintuitive because we've just gone through a massive shift of age pension changes where around three hundred thousand people lost their benefits. So, it seems like a massive tax grab where you no longer have any incentive to invest and better yourself with shares but at the same time, well good luck if you ever want to get on that age pension. Out of this I've been inspired in the next episode to actually tell you all these dirty little tax loopholes that Labor and the uninformed keep harping on about because really, does the government deserve more money? …And we'll tackle that in the next episode. So, thanks for the questions Adam and Tate and anyone else has any questions please leave them at financeandfury.com.au, if you just go to the contact page and type any questions that you have we can tackle them in another ‘Say What Wednesday’, so thanks for listening guys, and I hope you enjoy the rest of your day.
Episode 30– Who moved my cheese? Is Bill Shorten’s announcement about getting rid of franking credit refunds akin to a cat moving a mouse’s cheese? Is it necessary to repair the budget repair or thievery from retirees and self-managed superannuation funds? In this week’s episode we go straight to the top to get the answers. I interview John Maroney who is the CEO of the Self-Managed Superannuation Fund Association, which represents both Advisers and Trustees of SMSFs. So whether you will be directly affected by Labor’s proposed changes, or just want some insight into the political process, you are certain to benefit from listening to this week’s show. “There could be several adverse economic impacts if this policy is implemented.” – John Maroney “Franking credit refunds have been part of the tax framework for 18 years and a lot of people have made their long term investment plans around that system” – John Maroney The median income that a member of an SMSF is drawing is around $50,000 and the franking credits are $5,000 so this would cut 10% off the income of people who are generally not getting the age pension at all” - John Maroney “People who are affected should write their local Member of Parliament. Traditional letter writing has become a lost art” - John Maroney Today on the Finance Hour Podcast: The two groups that will be most affected if Labor’s proposal becomes law. The unexpected backlash from the announcement. Why John believes that the current system of refunding franking credits was good policy and was originally supported by both parties. How the proposal could affect valuations of Australian shares. What the Self Managed Superannuation Fund association is doing to influence Government. And don’t forget to listen all the way to the end for my “Propellerhead of the week” which is about some strange entries on my credit card statement following from my return home from Israel. Mentioned Resources: SMSF Association John Maroney LinkedIn profile Labor proposal to ditch franking credit rebates Thanks for tuning in! Thanks for joining us on today’s episode of the The Finance Hour podcast! If you enjoyed today’s episode, please head over to iTunes and leave us a rate and review to help us reach even more listeners. Don’t forget to check out our website, visit us on Facebook, or hang out with us on Twitter to stay up-to-date on what’s in store for you! See omnystudio.com/listener for privacy information.
1) Bill Shorten's ideas on Dividend Franking 2) Wesfarmers drops Coles 3) The Foolish Mailbag - Insurance Bonds, and buying stock right after the dividend payable date 4) Scott's High Horse - Buy and Hold is not dead! See omnystudio.com/policies/listener for privacy information.
The goal of early retirement is one many Australians aspire too. And certainly, when thinking about achieving Financial Autonomy, retiring early is very often baked into those goals. But what is the best way to bring that goal to reality, given the uniqueness of our system – superannuation, franking credits, negative gearing, and means tested Aged Pensions, just to get you started. The approach I’m going to take you through today is a multi-phase approach that I’ve built specifically for the Australian early retirement landscape. Its aim is to use the opportunities we have, such as franking credits and superannuation, to get you to early retirement as quickly as possible. We’ve actually built a special PDF just for this post. I’ve put all of the diagrams in there for you. You know what they say – a picture tells a thousand words. And I certainly think visualising this approach is helpful. So ideally have that in front of you as you consume this episode, but if that’s not practical, then at least download it latter. Early Retirement for Australians Download Early retirement in Australia – an overview To survive in our modern world, you need income. Long gone are the days where we grew all our own food, hunted for our meat, and lived a subsistence life. So retiring early necessitates solving the problem of how will you generate the income you need to meet your expenses, if you cease being in your current paid employment role. Let’s start with the helicopter high up in the air. We all know that in Australia we have the superannuation system to assist in funding our retirement. Considerable tax concessions are provided to encourage us to build up saving within superannuation. And then when we retire, we are able to convert our superannuation savings into an income stream, and receive even more generous tax concessions. Income drawn from superannuation is tax free from age 60 for the majority of people. Given the tax favoured status superannuation receives, you’d likely be wise to utilise this system to the maximum extent possible to generate your retirement income after you reach age 60. But what do you do before age 60? Well if early retirement is your goal, you need to have built up other investments, likely shares and property. In this pre-60 early retirement phase, you can rely on the income these investments produce, and you perhaps also sell them down progressively to live of the gains and proceeds of the investments, remembering that when you hit 60, you gain access to a new pool of savings – your superannuation. Okay, so that’s the overview – pre 60 you’re living off investment income, and perhaps also some employment income, and I use that term loosely – it could mean as an employee, but it’s just as likely to be some freelancing work, a short term contract, or as an advisor or consultant. Even if you’ve left your normal job, there’s a good chance that whatever you find to do with your time, you’ll pick up some income along the way. Then after age 60, superannuation is the primary solution for your income needs. The sub phases Let’s bring the helicopter down a bit lower now. Within these pre and post 60 phases, I believe you can break things down further. In the pre-60 phase, I’ve termed these two sub phases the Transition phase and the Investment Income phase. And in the post 60 phase, that can be split into the Active Retirement phase, and the Feet-up phase. Imagine that perhaps in your 30’s you’ve decided that early retirement is something that you aspire to. You crunch your numbers and determine the amount of income that you’d need to afford the early retirement lifestyle that you want. You could wait until you have enough investments and superannuation that you can live a total life of luxury. But most people I work with prefer instead to retire earlier, but still earn some income. I call this the transition phase. Maybe you back off from 5 days per week to 3. Remember episode 20 where I interviewed Adam Murray. He’d cut back to 3 days per week as a paid employee, and actually spread those hours across 4 days. Then he had time to pursue other projects, and be the father that he wanted to be for his 2 boys. So during the transition phase, you’re still earning some income, just less than pre-early retirement, and perhaps you’re also earning some investment income. As you get closer to 60, your investments have grown. In particular it’s highly likely that you’ve used some borrowings to build the wealth, for example borrowing to buy an investment property, and hopefully somewhere in this pre-60 phase, the debt gets repaid, meaning the rent which was going to loan repayments is now freed up for you to live off. So the second sub-phase in the pre-age 60 segment is the Investment Income phase. In the Investment income phase you’ve scaled any paid employment right back, possibly given it away altogether. You’re primarily living off your dividend and rental income, and perhaps even selling down investments in the knowledge you’ll be turning on the superannuation tap come age 60. Franking credits will keep your tax down here, and you can plan any capital gains tax events to get you the best possible outcome. Not anti tax Now let’s look at the post age 60 sub phases – Active Retirement and Feet-up. The Active Retirement phase is likely to be from 60 to 70 or 75. During this phase you’ve slowed down a little but still remain active – traveling and participating fully in your recreation activities like golf or yoga. As a result your income needs are likely the same as pre 60. Because you’ve turned age 60 and are retired from the work force, you can now access your super. And it’s likely that you will turn on an income stream from these savings, given this is the most tax advantageous element of the entire superannuation system. Thus the bulk of your income in the Active Retirement phase will come from superannuation. But it’s likely you will still have some investment income coming in as a bit of a top-up. Perhaps this can pay for the annual overseas trip. This Active Retirement phase could be an excellent time to realise any significant capital gains liabilities, for example selling a rental property, as your superannuation is a tax free income source so your total taxable income is likely negligible. The final post age 6o phase is the feet-up phase. At some point later in life you’re going to have done all of your traveling, and the realities of getting older mean that you slow down. Expenses tend to reduce, and medical appointments rise. During this phase the bulk of your investment have been used up, and you’re now living on your superannuation. Depending on your circumstances, an Age Pension may also come into the frame at some point, which will help in prolonging the life of your superannuation savings. Early Retirement for Australians Download An early retirement example So let’s play an early retirement scenario out, so that you can see the how your income need might be meet in each phase. Imagine we first sit down and develop an early retirement plan for you when you are 34. We work to that plan, refining as we go along, and by age 45, you’ve built up enough assets to be able to quit the high pressure career that has got you to the position you are now in. The first phase is the Transition phase. You’ve still got great contacts in your profession, and so whilst you want to step back from all the stress and travel of your corporate career, you’ve got an opportunity to do some consulting work for one client for a day a week, and another long-time professional friend has asked if you could do some overflow work for them as it comes up. Your income in the transition phase is therefore generated perhaps 2/3rds from these employment type earnings, and 1/3rd from the dividends from your share portfolio, which until now had been reinvesting all its income. You have an investment property too, but at the moment there is still debt on this, so the rental income goes entirely towards paying down this debt, and meeting the other bills like council rates and maintenance. Further on into your early retirement now and you enter the Investment Income phase. The rental property has been paid off, freeing up the rental income to further meet your expenses. The 1 day per week consulting gig has finished, but you’re still getting occasional overflow work from your friend. Your income split perhaps now flips, to be 1/3rd or perhaps even less from employment type income, and the bulk of your income comes from investments – share dividends, rental property income, and the occasional share sale when a lump sum expense comes up. You reach 60. You’re in the Active Retirement phase. You’ve told your friend you don’t wish to do any more overflow work – you don’t have the time! What with golf 2 days a week, volunteering as the treasurer of the local Rotary club, keeping up with the family, and regular holidays, you’ve got more than enough on your plate. So now you turn on the superannuation income stream. You’ve sold down most of your share portfolio by now but you still have the rental property so you have income from that in addition to your super. You have a great time during this phase, but by age 74, you’ve had a few health issues and are starting to slow down. You’re still playing seniors golf on a Friday, but you don’t fancy overseas travel any more and are happy to live a bit quieter life. You’re in the Feet-up phase. Maybe you sell the investment property around now. The maintenance is getting a bit of a bother and it’d be nice to have the cash available. Between the proceeds from the sale of the rental property, and your super, you see out your days without a financial worry in the world. So what do you think? A plan you could work towards. Early Retirement in Australia is possible and I think many people could imagine living out a scenario something like what I’ve just gone through. The reason most people don’t live that life though is because they never TAKE ACTION. Don’t let that be you. Don’t forget to visit the financialautonomy.com.au web site to grab the toolkit for this episode, because the glide path diagrams I’ve put together I think will be super useful to you in seeing how you might be able to retire early in Australia. Early Retirement for Australians Download Important Information: This information is of a general nature only and has been prepared without taking into account your particular financial needs, circumstances and objectives. While every effort has been made to ensure the accuracy of the information, it is not guaranteed. You should obtain professional advice before acting on the information contained in this publication.
It doesn't really matter with dick joke we told on this episode or who's stuck what in where. Franking none of the bull shit we talk about really matters. The only thing that matter are these 50 names. The name of the people who lost there life because of who they are. This wasn't 50 people at war over seas or some kinda of terrible natural disaster. This was a senseless act of hate and this should be stopped. So before you listen to this show, take a look at these names and try to remember at least one so that these human lives never are forgotten. Thanks Atom and Dave Stanley Almodovar III, 23 Luis Omar Ocasio-Capo, 20 Juan Ramon Guerroro, 22 Eric Ivan Ortiz-Rivera, 36 Peter O. Gonzalez-Cruz, 22 Luis S. Vielma, 22 Kimberly Morris, 37 Eddie Jamoldroy Justice, 30 Darryl Roman Burt II, 29 Deonka Deidra Drayton, 32 Alejandro Barrios Martinez, 21 Anthony Luis Laureano Disla, 25 Jean Carlos Mendez Perez, 35 Franky Jimmy Dejesus Velazquez, 50 Amanda Alvear, 25 Martin Benitez Torres, 33 Luis Daniel Wilson-Leon, 37 Mercedez Marisol Flores, 26 Xavier Emmanuel Serrano Rosado, 35 Gilberto Ramon Silva Menendez, 25 Simon Adrian Carrillo Fernandez, 31 Oscar A Aracena-Montero, 26 Enrique L. Rios Jr., 25 Miguel Angel Honorato, 30 Javier Jorge-Reyes, 40 Joel Rayon Paniagua, 32 Jason Benjamin Josaphat, 19 Cory James Connell, 21 Juan P. Rivera Velazquez, 37 Luis Daniel Conde, 39 Shane Evan Tomlinson, 33 Juan Chevez-Martinez, 25 Jerald Arthur Wright, 31 Leroy Valentin Fernandez, 25 Tevin Eugene Crosby, 25 Jonathan Antonio Camuy Vega, 24 Jean C. Nives Rodriguez, 27 Rodolfo Ayala-Ayala, 33 Brenda Lee Marquez McCool, 49 Yilmary Rodriguez Sulivan, 24 Christopher Andrew Leinonen, 32 Angel L. Candelario-Padro, 28 Frank Hernandez, 27 Paul Terrell Henry, 41 Antonio Davon Brown, 29 Christopher Joseph Sanfeliz, 24 Akyra Monet Murray, 18 Geraldo A. Ortiz-Jimenez, 25 Edward Sotomayor Jr., 34 Stanley Almodovar III, 23 Luis Omar Ocasio-Capo, 20 Juan Ramon Guerroro, 22 Eric Ivan Ortiz-Rivera, 36 Peter O. Gonzalez-Cruz, 22 Luis S. Vielma, 22 Kimberly Morris, 37 Eddie Jamoldroy Justice, 30 Darryl Roman Burt II, 29 Deonka Deidra Drayton, 32 Alejandro Barrios Martinez, 21 Anthony Luis Laureano Disla, 25 Jean Carlos Mendez Perez, 35 Franky Jimmy Dejesus Velazquez, 50 Amanda Alvear, 25 Martin Benitez Torres, 33 Luis Daniel Wilson-Leon, 37 Mercedez Marisol Flores, 26 Xavier Emmanuel Serrano Pink, 35 Gilberto Ramon Silva Menendez, 25 Simon Adrian Carrillo Fernandez, 31 Oscar to aracena-Montero, 26 Enrique L. Rios Jr., 25 Miguel Angel Honorato, 30 Javier Jorge-Reyes, 40 Joel Rayon Paniagua, 32 Jason Benjamin Josaphat, 19 Cory James Connell, 21 John p. Rivera Velazquez, 37 Luis Daniel Count, 39 Shane Evan Tomlinson, 33 Juan Chevez-Martinez, 25 Jerald Arthur Wright, 31 Leroy Valentin Fernandez, 25 Tevin Eugene Crosby, 25 Jonathan Antonio Camuy Vega, 24 Jean C. Nives Rodriguez, 27 Rodolfo Ayala-Ayala, 33 Brenda Lee Marquez McCool, 49 Yilmary Rodriguez Sullivan, 24 Christopher Andrew Leinonen, 32 Angel L. Candelario-Mast, 28 Frank Hernandez, 27 Paul Terrell Henry, 41 Antonio Brown, 29 of them Christopher Joseph Sanfeliz, 24 Akyra Monet Murray, 18 Geraldo to. Ortiz-Jimenez, 25
1 - Franking privileges; Openings. 2 - MailBag. 3 - The News with Marshall Phillips. 4 - People are mad at Ben Carson for talking about guns and shootings for some reason.
6 AM - 1 - Franking privileges; Openings. 2 - ; MailBag. 3 - The News with Marshall Phillips. 4 - People are mad at Ben Carson for talking about guns and shootings for some reason.
There has been a wide-spread misconception based on the imprecise wording of Art. 52 of the European Patent Convention (EPC) that the protection of business methods by patents is prohibited in Europe. This paper investigates the legal framework set by patent laws with respect to the patentability of business methods, contrasting the situation in lege in Europe and the situation in the US. It is shown that in praxi business methods have never been excluded from patentability in Europe. In the empirical part of the paper, 1,901 European patent applications relating to business methods are identified and major patent indicators are computed. Further, a case study from the franking device industry which is characterized by strong competition for intellectual property rights is conducted. It contains evidence for the strategic use of business method patents leading to opposition rates against granted patents of 44%.