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Money Magazine December 2017

Money magazine is Australia’s longest-running, highest-selling and most-read personal finance magazine. Money magazine provides credible, independent, easy-to-understand financial advice to help its readers save money and make the most of their investments.

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11 Issues


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early financial education has its rewards

I’m a 41-year-old female from Newcastle. I am writing to thank you for making a huge difference to my life. I grew up in an average home. My parents struggled financially most of the time; they both were very uneducated but hard working. I started watching the Money TV show when I was around 14 years old and decided then and there that I would make my life different and never struggle for money. So while working at Woolworths on the weekends I saved 50% of my wage and paid cash for my first car at 15 before I could even drive it. I saved a deposit for a house by 20 and bought an investment property at 22. Fast-forward to today and we own our dream home outright, have four investment properties,…

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set the financial goals

How has 2017 worked out for you? Maybe you paid off some debt, started investing in an ETF, bought your first home or boosted your super? Hopefully you did kick a few financial goals and you’re feeling confident. The reality, though, is that a combination of high household debt, low wages growth, low yields and a jump in energy and gas prices have all weighed heavily on our wallets. Greg Hoffman (page 40) says there is plenty to worry about in a country that hasn’t experienced a recession in 27 years – “one in which many households have borrowed to the hilt to get into expensive housing markets in several cities”. On the other hand, Shane Oliver (page 44) is a little more optimistic about the opportunities. As he says, “non-US sharemarkets…

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“Horrible” aged care trap Congratulations to your contributor (November) outlining how some residents of retirement villages can suffer great financial loss if they have to move to aged care and need the funds from the retirement unit to pay for the refundable accommodation deposit (RAD). Unless you have the funds for the RAD upfront you pay interest on the outstanding amount and it can take quite a long time before the exit funds for a retirement unit are available. In addition, the final exit price usually has quite high fees and what’s left may still not cover the RAD. It’s also amazing that a village operator cannot supply an exit payment as soon as a resident leaves as it’s the village operator who actually owns the units. I have brought all this to…

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what are you looking forward to this summer?

EFFIE ZAHOS Money editor Effie says: “Slowing down a little and enjoying my family. Tying up loose ends so I can stop thinking about what needs to be done. Head home to the Goldie and unwind with barbecues, day-time drinking and going for a dip at Tallebudgera Creek.” ANN LOVEDAY Money’s art director Ann says: “I’ll be very happy in the frame, entertaining and feeding pals at home and mixing up my best margaritas. For me there’s a contentment to summer in Sydney, the drone of cicadas, the scent of frangipani, the warmth of the sea and the hustle of a busy home BBQ. Bring it on.” MARIA BEKIARIS Maria, Money’s deputy editor, says: “Lazy days reading and watching the kids playing in the backyard, catching up with friends and family over a drink or…

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the omens are good for an investor over the coming decades

‘Read all the alarmist comments and you’d end up hiding in a cave with a supply of baked beans and water’ Here we are again. The end of another year and time for me to scrape the cobwebs off my highly flawed crystal ball and ponder what may happen in 2018. As I have done each year since Money magazine began, it seems only fair to take a look at what I said last year. For most of us the key issues are likely to be property, shares, interest rates, employment and the Aussie dollar. I’ll give myself about eight out of 10 for my predictions for 2017. Let’s take a look back to what I said in late 2016 about 2017: “Property prices should slow and fall in some areas of oversupply.…

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ignore property doomsters

Has the Sydney property market peaked? The headlines use the word “pivoted”, claiming the boom is over and the phenomenal growth has come to an end. But it’s irrelevant commentary because nobody is buying “Sydney”! Instead, they’re buying a single property in a localised street in a localised neighbourhood within a highly fragmented property landscape. Property is an essential need and remains that way whether the market is going up, down or sideways. So how should investors navigate this market? Focus on the core fundamentals (at suburb level) indicating that demand still exceeds supply: • Days on market – are buyers still eagerly snapping up properties or are they hanging around? • Stock on market – is the suburb undersupplied or are there plenty of listings? • Auction clearance rate – are most properties still…