Indholdsfortegnelse for May 2023 i Money Magazine

BACK TO BASICS Serina Bird We’ve all been there: you hear about someone having a new baby, being in hospital or losing a loved one, and you go online and buy flowers, balloons, chocolates or even a hamper. There is nothing wrong with flowers. I love flowers. Local florists need our support, and their work is an art form. It’s just that flowers are expensive and in recent years have become even more so due to increased costs of fertilisers and (especially for imported flowers) freight. Too much of a good thing When I’ve had hospital stays, I’ve often been surrounded by flowers. But as lovely as they are, they can be problematic. There is rarely enough shelving space to accommodate them and they can get in the way of…

Amid ever-rising rents, bogus bond claims are another sore spot for renters. With the stress of moving out and finding a new place, most renters don't have the stomach for navigating a bond dispute, which means landlords can get away with making claims with little legal justification, such as to make improvements or to cover fair wear and tear. It's no surprise that frustrated tenants want a change, suggesting ideas like requiring landlords to provide proof that they have actually used bond funds to make repairs. What can make this better? Well, the new NSW Labor government has committed to a scheme of transferable bonds, allowing tenants to use their old bond to fund their new bond, instead of needing to stump up thousands of dollars in one go. Some…

Use spare cash to boost your super We’re getting close to the end of the financial year and if you've got spare cash and are looking to generate tax deductions, you could add it to your super. Provided the total amount of your contributions (including those made on your behalf by your employer) does not exceed $27,500, this can be a great option to boost your retirement savings and claim a tax deduction for the personal contribution. The payment must be made by June 30 and you need to advise your super fund that you’ve made the payment by the time you lodge your return. Your fund or accountant can give you guidance on how to complete the form. There's a standard form on the ATO website at ato.gov.au/forms/notice-of-intent-to-claim-or-vary-a-deduction-for-personal- super-contributions.…

MORE PROPERTY STORIES ON P62-67 It's tough out there for pet owners Renting anywhere in Australia right now can be a challenge, but imagine doing it with a family pet in tow. A study by Suburbtrends has revealed the hardest suburbs for renters with pets by analysing listings that specify “no pets”. Every suburb was rated with a Sad Puppy score, taking into account prices, vacancy rates and, of course, those dreaded words. Suburbtrends founder Kent Lardner says the score measures the severity of the situation for renters. “The most difficult suburbs for renters with pets are those that receive the worst Sad Puppy Score, indicating a rent increase of 5% or more, vacancy rates below 1.5% and over 30% of rental listings prohibiting pets.” So, where are the worst…

Australia's love affair with exchange traded funds (ETFs) looks set to blossom further, with ETF provider Global X predicting the country's exchange traded product (ETP) market, which is largely dominated by ETFs, will reach $200 billion by 2025. Global X believes investors will continue to flock to the sector, which has grown 7% in the past 12 months to $136 billion, especially as the number and diversity of options expands. “By 2025, we anticipate there will be more than 350 listed ETPs on the Australian market, which will be worth more than $200 billion,” says Kanish Chugh, the head of distribution for Global X. “There are still gaps in the market for providers to list innovative investment solutions and ETFs are the most convenient and costeffective vehicles for Australian investors…

Michelle Deaker describes herself as a serial entrepreneur. The investment firm OneVentures is among the several businesses she has founded. The first was a tertiary tutoring college, back in her early days at university. “I was always very entrepreneurial, and that taught me the first things about business and making sure you were profitable.” The second business was Networks Beyond 2000, an online computer retailer. Later, another idea sparked after her mother-in-law was given a gift voucher and Deaker’s partner suggested that selling vouchers online could be a good idea. “I went home and bought all the domain names around gift vouchers, and we created what became one of Australia’s first fintechs,” she recalls. “I sold that to a UK-listed company and started investing my own money.” Not surprisingly, start-ups…

Q I'm a 34-year-old single mum with a 15-year-old who attends a private school. I earn $80,000-plus a year and receive child maintenance of $650 a fortnight and a government payment of $135 a fortnight, which will end once my teenager turns 18. I have no credit cards or loans. I sold the family home in 2021 and placed my profit from the sale into a savings account. My belongings are in storage at a cost of $640 a month and I pay $320 a week in rent. I own two cars, have $540,000 in savings, $23,000 invested in shares and $22,000 in superannuation. I'm struggling with deciding on where to invest my money and how to plan for my future. I'm wondering if I should buy a small property outright…

Q My wife and I have been running a self-managed super fund for the past 12 years or so and have been satisfied with its performance. But we are both now well into retirement and at the stage where we are just drawing down on the super and we no longer want to spend the effort of running the fund. Also, should one of us become incapable of running it, we would need to wind it up. So, we are going to wind up the SMSF and roll the balances into an industry fund. My wife already has a balance in Aware Super from when she worked. Aware has performed well for her, so we are wondering if I should open an account with them. Should I choose a different…

What is it? Across the world we are seeing marginalised communities having to fight for their right to survive. Transcend is a group working towards a world where trans, gender-diverse and non-binary children are embraced and given an opportunity to thrive. Where your money goes Donations go towards supporting Transcends' activism with as little as $30 helping to run peer support meetings for parents and carers. Transcend also creates a tonne of resources for all walks of life to support, affirm and celebrate the lives of trans, gender-diverse and non-binary children. How to donate: Visit transcend.org.au to make a financial donation or to volunteer. ELIOT HASTIE WEBFIND www.chartr.co If you love a good story and like to be wellinformed, you'll enjoy Chartr's twice weekly digital newsletter. It's jam-packed with interesting…

INCLUDES LAST-MINUTE BOOST: 5 WAYS TO GET THE MAX BACK ON YOUR TAX P36 A BIGGER REFUND: WHY GOOD RECORD-KEEPING PAYS OFF P37 REBATES: LOW INCOME EARNERS STILL BENEFIT P38 PREP YOUR RETURN: THE FOUR Rs TO GETTING IT RIGHT P42 THE AUSTRALIAN TAX OFFICE (ATO) handed out refunds totalling more than $38 billion to 10.8 million Australians in 2022. It was a bumper year that saw the average refund top $3000 – extra cash that many of us will be sweating on this year. While the end of several pandemic tax breaks could slim down your 2023 refund, there’s still time to get the max back on tax. HOW YOUR REFUND IS CALCULATED Let’s strip away the mystery of tax refunds. The tax you pay each year is based…

CPA Australia’s tax policy expert, Elinor Kasapidis, sets out four critical rules to follow this tax time. 1 Record everything Get your record keeping right this tax time. Keep a detailed diary throughout the year noting down when you worked from home, and hold on to documents relating to your home expenses, such as electricity and other utility bills. 2 Retain receipts If you incur a cost you plan to claim, you need to keep the receipt. 3 Remain realistic Don’t get carried away when submitting your tax return. If you’re claiming work from home expenses, for example, the ATO is unlikely to accept a deduction for a packet of Tim Tams eaten during your coffee break at home. 4 Reach out Seek advice when submitting your return and get…

When Richard Walsh took delivery of a Toyota RAV4 hybrid early last year, he had visions of it being part of his garage for years to come. The car was to be predominantly driven by his wife, and the sensible size and fuel-sipping petrol-electric drivetrain made plenty of sense to the Sydney butcher. Within months, Toyota announced an updated model with new features, including a larger 10.5in infotainment screen and 12.3in digital instrument cluster. “I’d been planning to hold onto the car for years, but I found the smaller screen a disadvantage … I wanted the new tech,” says Walsh. Even though there had been price rises with the updated model, Walsh investigated the cost of trading up. Solid demand for used hybrids meant he was able to sell the…

BANKING Michelle Baltazar Credit cards are back with a vengeance. Monthly purchases reached a record high of $33.5 billion in January, according to the latest report from the comparison site Finder. There are more than 13 million credit cards in circulation, with one in four Aussies admitting they can’t manage their finances without one. While misuse and mismanagement of a credit card can lead to a downward spiral of indebtedness, there are some things you can do to avoid the fees and stay in the black. Banking rules introduced in 2019 are designed to curb over-borrowing, wit tighter rules on credit limits, balance transfers and charges. Despite these, many users can be caught out by living well beyond their means: only 8% of respondents in a Finder credit card survey…

MIND GAMES Phil Slade Holidays are amazing. I personally love the beach and find myself each Christmas drawn to the Sunshine Coast in Queensland. Early morning walks around the headland, swimming with my sons every morning, saunters along the sandy inlets with the water lapping over my feet - it’s everything my mind, body and spirit need. After a week or so in this state of bliss, most people find themselves magnetically drawn to the real estate agent’s window, musing about a life where work and this feeling of peace and freedom can co-exist. The inevitable return to work quickly relegates these thoughts to the mental filing cabinet drawer titled “delusional fantasies” as the everyday stresses and challenges consume our attention. However, after a few years of repeating the holiday…

MY MONEY OCCUPATIONS In just over six months, thousands of young Australians will be finishing year 12 and moving on to the next stage of their lives, which will begin with making a decision. Typically, they will choose between obtaining a university degree or undertaking vocational education training (VET). Most will choose the former. Recent data from the Australian Bureau of Statistics shows 63% of people aged 15-74 have a post-school qualification, roughly split between bachelor’s degrees and TAFE certificates. In the younger generations, bachelor’s degrees are the clear winner. What’s losing out, however, is the trades sector. Australia faces a serious shortage of skilled tradies. According to the National Skills Commission (NSC), across all technician and trades worker occupations assessed for the 2021 skills priority list (SPL), 42% were…

A young couple, Victor and Helen*, have a combined household income of $180,000. In late 2020 they took out a $600,000 loan to buy a two-bedroom inner-city unit under the First Home Loan Deposit Scheme on a threeyear fixed rate of 2.3%. Their monthly repayment is $2300 over a 30-year loan. They are expecting their first child in August, which would temporarily bring down their household income to $95,000, while their home loan repayments would then reset to a higher $3370 a month (up 47%). Unfortunately, the value of their property has gone down since they have bought it and is now in negative equity (they owe more than it is worth). They had set aside $30,000 in joint savings to prepare for their young family, but are now concerned…

Many women become eligible for the LISTO tax break about the time they leave the workforce or reduce hours to raise children, usually when they are in their 20s and 30s. This is also the stage in life when the super gender gap widens – the average super balance gap of women doubles from 15% less than men at 30 to 30% less once a woman reaches her 40s. Women in Super supports raising the LISTO in line with the increase in the income threshold, as part of a range of measures to fix the gendered inequalities in super. “Raising the offset in line with other tax changes would help ensure that low income workers, the majority of whom are women, aren’t the only Australians paying more tax on their…

In fact, other than “they all use computer technology to interact with customers”, it might be the possession of impressive business models that typifies this group. Execution matters, of course – potential will only take you so far. Which brings us back to some of the best-quality businesses in this sector. REA Group, Carsales and Seek dominate their sectors. Xero is almost a byword for cloud accounting. And Computershare is the biggest name in share registries by a wide margin. Still, for recurring revenue, profitability, a track record of growth and a defensive customer list, it’s hard to go past one of the lesser-known businesses in this sector, despite the word being in the company’s name. For a second year running, TechnologyOne is our Best in Breed.…

THE HOT SEAT At what age did you start taking surfing seriously? At the age of six, my family and I moved to Margaret River in Western Australia, where I was able to surf bigger and better waves. I started joining every grom competition and got my first paid contract when I was 11 years old. What’s it like to be crowned male surfer of the year - three times? It’s a remarkable achievement and something I am so grateful for. It takes an unwavering dedication to training and a willingness to push past my limits to reach success in competitions, and being recognised for that is incredible. Do you recall your earliest money lesson? When I started receiving a salary as an 11-year-old, my mum made sure I saved…

It's tough trying to survive on the pension After a storm comes sunshine - that infamous adage keeps us afloat but for this ageing girl it's left me confused, wondering if one shouldn't just live for today and to heck with tomorrow. My retirement fund, interest from fixed deposits and dividends would help keep my head above water, right? Oh, and in the meantime, throw in a marriage split. Interest rates fell to below 1%, the bum dropped out of my retirement fund, no (or very little) dividends and now half the proceeds from a house sale, which might give me near $400,000 if luck is on my side. Change the habits of a lifetime and live for today, continue to live frugally and remain positive or ask one of…

$3bn and counting: more needs to be done to beat scammers We've all read the frightening stories about some poor soul who transferred their life savings to a bogus bank account - or a fake lover in another country. Many of us would have even received the “Hi mum" text messages that were circulating earlier this year, supposedly from a child who’d lost or broken their phone and urgently needed funds. But the news that Australians lost more than $3.1 billion in scams in 2022 - an 80% increase from 2021 - may come as quite a shock. The Australian Competition and Consumer Commission (ACCC) released the findings of its Targeting Scams report last month, revealing $1.5 billion was lost to fake investment scams, including initial public offering scams and…

BOOK OF THE MONTH STOP WORRYING ABOUT MONEY: START PLANNING NOW TO SECURE YOUR FINANCIAL FUTURE With the cost of living at a record high, you're probably experiencing more than your fair share of financial worries. Author and personal wealth and money management expert (including 20 years as a partner at Deloitte) Jacqui Clarke has plenty of practical advice to help you navigate common and challenging financial obstacles. Among other things, you'll learn how to avoid typical money traps and get better at using your money. Think of this guide as your no-nonsense financial wake-up call. DEBRA DUNCAN Five readers can win a copy. In 25 words or less, tell us what money tip you wish you'd known about years ago. Enter online at moneymag.com.au/win or send entries to Money,…

The nation's most expensive Airbnb houses have been revealed in a report by the currency exchange S Money, which shows cashed-up travellers are willing to spend close to $25,000 a night for luxury. Australia's most expensive property, in Sydney's South Coogee, is Crypto Castle, which is owned by Finder founder and bitcoin tycoon Fred Schebesta. It rents out for $24,861 a night and is described as a winding sculpture of concrete and stone. Coming in just below it is Makepeace, the private island owned by Virgin Australia founders Richard Branson and Brett Godfrey. Located in the Noosa River on the Sunshine Coast, it goes for $24,703 a night. Of the top 10, four are in NSW, with three each in Victoria and Queensland. Number 10 on the list is a…

As a child she wanted to be a medical doctor. Her entrepreneurial mother founded a school, and a great-uncle started the SPC foods group. Her first job was in her father’s engineering firm doing plan printing. She enjoys swimming, bushwalking, running and reading crime novels, and she supports the performing arts. Her biggest regret is not being able to travel more for pleasure and to explore the world. Her first business venture was selling lemonade and flowers in her neighbourhood. She advises people not to be emotional when investing but rather to be data driven and disciplined.…

2022 Wickham’s Road Gippsland Pinot Noir $19.95 This range is among Australia's finest budget-priced pinots. With this vintage, there’s a worthy addition - a wine sourced from the cool Baxendale's Vineyard in Whitlands. My favourite is the Gippsland pinot: subtle, gently aromatic, dark berry flavours flowing through to a silky smooth finish with pleasing purity of flavour lingering. Remarkable value. SPLURGE 2022 Tapanappa ‘Tiers Vineyard’ Chardonnay $110 While the quality of Australian chardonnay is improving exponentially, Brian eraser's ‘Tiers' y remains among the finest as it glides into its fifth decade. Consecutive, near perfect and slightly cooler vintages in the Piccadilly Valley in the Adelaide Hills have once again produced a delicate and pure white with grapefruit and nectarine flavours: satisfying in the mid-palate, yet with a tight, minerally edge.…

PAUL’S VERDICT Paul Clitheroe Where should I invest to top up my wealth? I am 32 and my question is about investment vehicles. At the moment, I have two residential investment properties, a house and an apartment, in Queensland and Melbourne respectively. Both are negatively geared due to higher interest rates and worth around $450,000 and $550,000 respectively. I also own a few exchange traded funds (ETFs) worth a little over $100,000. I contribute to super and the balance is reasonable for my age. My income is good with potential to grow further in the future. My goal is to eventually buy a principal residence in Sydney, although with prices sitting around $1.5 million to $2 million it seems like a long way away. i don’t want to buy any…

Meredith Wilks* runs a media consultancy in regional NSW. She operates as a sole trader and, as such, the business has few significant running costs, such as staff or trading stock. Wilks says she is increasingly turning to concessional super contributions as her main tax deduction. “In the past few years, I’ve taken advantage of temporary full expensing to upgrade my office equipment, buy a new computer and several printers,” she says. “I also purchased a new car last financial year to take advantage of the instant asset write-off. These have been valuable deductions, but there’s only so much new equipment the business needs.” This year, Wilks is turning to super to bump up her deductions. “I’m in my 50s, so super has suddenly become really attractive to me, and…

Investors can minimise their tax bill through a variety of strategies. However, Mark McShane, from Chrysalis Lifestyle Planning, says it’s important to consider whether your income in the following financial year is likely to be higher or lower to maximise any tax savings. He also cautions against looking at tax savings in isolation. “Consider the bigger picture of the planning pie. A strategy that provides a big deduction in one year may be questionable in terms of how it impacts your long-term goals.” This being the case, he recommends discussing any investment-based tax strategies with both your financial planner and accountant. If you own listed assets, such as shares and exchange traded funds, there may still be time for a portfolio review. “Given the annus horribilis we saw across sharemarkets…

According to ASFA, the federal government needs to change the law so that the SG is paid at the same time as wages to address the gaping hole of unpaid contributions. It states that while many employees receive their super contributions at the same time as wages are paid, many employers pay contributions quarterly. “Some employers fail to pay the right amount of contributions or do not make contributions at all. Requiring super contributions to be made more regularly, together with enhanced ATO enforcement activity, will lead to greater SG compliance," ASFA's pre-budget submission to the government states. Given the significance of the problem, ASFA recommends a multi-faceted approach. “First, requiring employers to pay SG contributions at the same time as wages would make it easier for employees to monitor…

Despite the downward trend in used car values, there are pockets of resistance. Toyota LandCruisers are at the front of that queue, both in their luxurious 300-Series guise and the more rugged 70-Series. “There are still long waiting lists for some vehicles,” says Ross Booth, the general manager of Redbook.com.au, who also points to hybrids such as the Toyota RAV4 and some four-wheel drives. With some consumers desperate to jump a long queue, it means savvy sellers can pocket a profit. Some dealers are in on the act, too, selling what are effectively new vehicles – with fewer than 100 kilometres on the odometer – as used cars for tens of thousands more than their recommended new vehicle price. Of dozens of basically new LandCruisers on the market, most are…

FAMILY MONEY Susan Hely "He’s 18. He’s finished school. I’ve done my job to get him there. It’s up to him now,” a friend of mine told me recently. I understood where she was coming from, but my experience is that parents are still involved - particularly financially - in the next phase of their kid’s life from 18 up to when they establish themselves in the workforce. Most likely she will have him living at home for several more years. In fact, even after your kids have finished studying, they may still be living at home, according to census data. Around 50% of all 20- to 24-year-olds still live in the parental home, up from 33% in 1981. Men are more likely to stay at home than women. Young…

1 Earn more (without increasing your expenses). This seems obvious, but most people are so afraid of change they persist in jobs that underpay and undervalue them. When you do get a pay bump, resist the urge to procure more lavish things. If you're surviving just fine now, that doesn't need to change. 2 Spend less. In our consumptionled culture, there is a lot we spend money on that we can do without: cutting back on dining out, cancelling subscriptions you don't use, letting the grocery discounts guide what you cook, and buying generic products instead of brand-name items. If you struggle to cut back, ask why? Why does it make you feel good to have these things? Find other ways to fulfil these needs that don’t hurt your wallet.…

The financial rewards were certainly part of the attraction for Rohan Grant-Dawes, who undertook an electrician apprenticeship because he saw that it would help him reach his financial goals. “I want to buy a house by the time I'm 30 and going into university would mean I'd incur a HECS debt and start down the ladder to eventually climb up it,” the 21-year-old says. "Whereas with a trade, once you're qualified you can easily be on $45 an hour and have no HECS debt, so you're already $80,000 ahead of others your age.” Grant-Dawes says there are plenty of fields for people to choose from, with various benefits, but there are sacrifices. “It's early mornings, it's physical and hard labour and a lot of the time working in environments that…

REAL ESTATE Pam Walkley Rising inflation hits many older people hard, because once you retire and start living off your savings, inflation eats away at your purchasing power. And living costs for retiree households are often skewed towards the areas with the biggest price rises, such as food and power, given retirees generally spend a higher portion of their income on these goods than working households. Retirees living on fixed incomes - either the pension, their super or a combination of the two - can’t ask the boss for a pay rise, but they can utilise their family home to increase their spending power and improve their standard of living. There are three main ways you can use your home to provide more money to give you a better lifestyle…

MANAGED FUNDS Max Riaz The real world around us is rapidly being digitalised. Consider for a minute the notion that our environment is a living system with infinite characteristics from which we can measure and capture data. This data can then be processed into information to help us have a greater understanding of our environment so we can better manage our lives – for example, predict adverse weather, the impacts of climate change, pollution etc. Similarly, industry and commerce are also dynamic and living systems in which people trade and machines produce, with systems and processes forever being developed and improved to transform raw inputs into finished goods and services. The characteristics of these systems are also infinite and the more characteristics we measure through data capture, the more we…

• Plant-based meats: Products made from grains, legumes (for example, soy) and vegetables (peas) that offer a plant-based alternative to animal protein products. Sometimes they are designed to replicate the taste and feel of conventional meat. • Lab-grown meat: Otherwise known as cultured meat, these are produced using real animal cells. Lab-grown meat is not currently approved for sale in Australia, but other countries have already given it the go-ahead. Singapore last year became the first country to approve the commercial sale of protein grown in a lab. During the COP27 summit in Egypt, the Singapore pavilion served delegates cultivated chicken nuggets produced by Good Meat, a subsidiary of US firm Eat Just.…

THIS MONTH Marcus Padley In “the good old days”, there was no TV, no internet, no reality shows, no Netflix, no Stan, no Kayo, no The Mandalorian (the horror!), just sexism and billiards. In the good old days, after dinner, the men would retire to play snooker and talk business while the women remained at the table to gossip about less important matters. This was the way. And how has this post-dinner tradition progressed? These days, after dinner, we turn on a reality show where the celebrity apprentices have to lose weight, cook, build a block of flats, play with Lego, be drug tested, be breathalysed and evade an international border patrol on the way to their own marriage to someone they’ve never seen, in the nude, in the jungle…

Resident cartoonist I had an epiphany about a year ago and stopped partaking of the booze. This was difficult as I'd become extremely good at it over the previous 45 years. The eventual result was a lot more motivation, concentration, optimism, discernment, clarity, peace and productivity. And definitely a lot more money in my bank account than there used to be. Cheers! Contributing writer We refinanced our house a couple of years ago, something that saved us thousands. More recently, we've chosen a cheaper gas and electricity plan. This time around the need to cut back seems different, though, so it's refocused my inner saver. I'm more discerning with supermarket purchases and have cut back on alcohol ($15 bottles of wine look more appealing than ever!). Senior writer I haven't…

Young people are missing in action in the small business sector. CPA Australia's Asia-Pacific Small Business Survey shows small business owners in Australia are more likely to be over 60 than under 30. Australia faces a tipping point. As older business owners and managers retire, who will take their place? Who will run our hairdressers, cafes and local shops? How we answer these questions will have dramatic effects on our living standards. Without the diversity young people bring, we will fall behind. Without their technology skills and appetite to take risks and innovate, we will suffer long-lasting economic effects. We need next-gen business owners, start-up founders and entrepreneurs. CPA Australia members have told us that the uncertain global economy, higher interest rates, rising costs and expensive housing all play a…

FRIENDS WITH MONEY #93 INFLATION BUSTERS Guest: Financial adviser Helen Baker Hosted by: Tom Watson While inflation may be easing, the price of goods and services is still heading upwards and showing no signs of slowing down. What could your household be doing to push back and make things a little easier? Plenty, according to author and financial adviser Helen Baker, our podcast guest. Money’s senior journalist Tom Watson asks her the important questions we need answers to right now, such as: Why is life still getting more expensive? Do we need to adjust our financial mindset? How can we push back against price rises and save? DEBRA DUNCAN SCAN THIS CODE TO ACCESS ALL OUR FRIENDS WITH MONEY PODCASTS…

The federal government is advocating a pay increase for minimum wage workers that is at least in line with inflation, but is facing push-back from some industry groups. The Fair Work Commission (FWC) has commenced its annual wage review, ahead of determining the new wage rates. They will come into effect on July 1 and impact the take-home pay of 184,000 workers on the minimum wage, which will flow on to 2.67 million workers on award wages. In its submission to the FWC, the Albanese government has argued that the commission should "ensure the real wages of Australia's low-paid workers do not go backwards”. But the government does not suggest that wages across the board should automatically increase in line with inflation, which indicates that those on higher wages will…

MORE INVESTING STORIES ON P6S-77 Student debt set to jump Millions of Aussies with outstanding student loans appear almost certain to see a sizeable jump in their debt from June 1. While a HECS-HELP loan is often seen as one of the cheapest forms of debt because it doesn't attract interest, it is indexed each year to reflect changes in the cost of living. And because inflation has been running so hot, it's possible that the indexation rate applied from June could be 6% or higher. “With the current inflation factor sitting at 3.9% - the highest in a decade - and with this likely to increase in a month's time, we need to start thinking about the trade-off between paying the minimum HECS and making voluntary repayments,” says Glen…

Since we first recommended this stock as a buy five years ago, revenue has barely grown and profits are meagre. Yet it is now more expensive and held in all three of our funds, as well as in my own portfolio. RPM has traditionally sold software on a perpetual licence. That meant that a buyer made a large upfront payment and smaller annual payments. This stopped around 2017 when the business turned away from perpetual licences and towards selling annual subscriptions. The transition from licence revenue to subscription revenue, however, involves an awkward period of falling revenues for the provider. As subscriptions replace licences and maintenance fees, the immediate effect of selling more subscriptions is that revenue tanks. This is clear in the numbers. In 2017, for example, RPM sold…

ASK PAUL Q & A NEED PAUL'S HELP? Send your questions to: Ask Paul, Money magazine, Level 7,55 Clarence Street, Sydney NSW 2000 or money@moneymag.com.au. Sorry, but Paul can’t personally answer your questions other than in the Q&A column. By submitting your question to Money you consent to having your question and the response you receive from Paul published in the print and digital edition of Money. Q In 2019, we purchased a home for our daughter, who is a single mum with one child. She pays all bills and the mortgage. My husband is 70 years young and I am 63. We are aware we cannot receive a pension or healthcare card as we are deemed to have too many assets. I'm now in a quandary as to which…

ASK PAUL Q & A Q Our brother recently died suddenly without a will. Verbal discussions were that his assets would be shared with 10 nephews and nieces. Now, due to the lack of a will, four siblings are to share in the estate, which is worth about $500,000. We wish to comply with his wishes, but if the estate is distributed to us and then we pass it on to my brother's nephews and nieces, we believe that gifting provisions apply, which would impact on age pension payments for two sisters. Is there a way for them (or all of us) to not receive an estate distribution and to pass it directly to nephews and nieces without impacting a pension? Yow! This is not good news, Sue. My commiserations…

My initial thought was how well you were doing financially, Jo. Your question did cause me to think about where a 32-year-old should be in terms of wealth creation. I started out by recalling my financial situation at 32 and on paper it was not a pretty sight. Vicki and I had our first little bub at that age. We had started, with my partners, our business, Ipac Securities, and it had grown to a point where it could start to pay us a modest salary. Vicki, a school teacher, thankfully had maternity leave. We had a tiny home, on a busy road, with a big mortgage. On paper, we looked pretty crook, with very little wealth indeed. But now I think about it, we, like you, had well-defined plans…

After several years at university, 25-year-old graduate Kate is relishing her full-time income. However, she is also mindful of her $48,000 HECS-HELP debt. By claiming all the deductions she is entitled to, Kate can lower her taxable income, on which HECS-HELP repayments are based. To make the task easier, Kate has been using the ATO app. “It’s pretty useful, especially to avoid having a pile of receipts to have to sort through when it comes to tax time. Or worse, having to go through the bottom of all my bags to find receipts,” she says. “It’s simple and easy to use. You just note your expense, what category it sits within and what percentage you can claim as a tax deduction. You can also upload a photo of the receipt.…

Despite the name, capital gains tax (CGT) is not a separate type of tax. Instead, any capital gains you make on the sale of an asset, such as an investment, are added to your assessable income. A CGT discount of 50% is available for individual investors who have held onto the asset for at least 12 months. Even so, capital gains can bump up your marginal tax rate in a given year. The real sting is that capital losses can only be used to reduce any capital gains. You can’t claim capital losses to reduce your taxable wage or salary income.…

Until last July, people earning less than $450 a month from a single employer weren't entitled to super. Many workers in the gig economy missed out. That has changed. Whether you work full-time, part-time or as a casual, your employer is obliged to pay you the SG on every dollar you earn. You can check whether they are paying the correct amount using the ATO’s tool on the link below. “Pretty much everyone who is over 18 is entitled to super. Those under 18 are eligible providing they work over 30 hours a week,” says Xavier O'Halloran at Super Consumers. The SG rate is currently 10.5% and will rise to 11% in July. It will continue to rise until it reaches 12% in July 2025. "That’s a fair chunk of…

You can help your kids to work towards moving out of home by: • Insisting they save some money from their part-time work to instil the financial discipline. • Asking them to pay some rent so they get used to the idea. • Making sure your kids establish an emergency fund in case of any unforeseen events, such as losing their job. • Building a collection of household items for when they move out. Let relatives and friends know if they are getting rid of furniture or whitegoods. Or check council clean-ups or free market websites. • Encouraging them to find a viable house with affordable rent, sharing with people who can meet their financial commitments, such as bill deadlines. An unemployed housemate may not be ideal. • Working out…

Anthony O’Brien SMALL BUSINESS First, let’s be clear that most economists are not expecting a full-blown recession in Australia. NAB’s latest forecast is for the economy to grow by 0.7% in 2023 and 0.9% in 2024. The Reserve Bank says growth has slowed, but GDP is still up by 2.7% this year. Westpac is forecasting positive (though low) levels of growth for 2023. Nonetheless, CommBank’s latest Household Spending Index fell in February, indicating weaker consumer sentiment. “We are seeing the growing impact of higher interest rates, with consumers taking stock and prioritising what they are spending their money on,” says CommBank senior economist Belinda Allen. The upshot is that we may avoid a recession, but with Australians watching every dollar, it pays to create an action plan for your business…

SUPER Vita Palestrant The super system’s tax incentives encourage people to save for their retirement and are especially generous for those on high incomes. To even things up, the federal government introduced the low income superannuation tax offset (LISTO) for low income workers. Currently, if you earn $37,000 or less a year, the LISTO will refund you up to $500 for the 15% tax you’ve paid on your concessional (pre-tax) super contributions. These include your employer’s compulsory contributions, called the super guarantee (SG), salary-sacrifice contributions you may make, or any contributions you make for which you claim a tax deduction. The measure is designed to make the super system fairer and ensure you don’t pay more tax on your contributions than on the amount of income tax paid on your…

Defiance Quantum ETF (NYSE: QTUM) The investment seeks to track the total return performance, before fees and expenses, of the BlueStar Quantum Computing and Machine Learning Index. The index consists of a modified equal-weighted portfolio of the companies that derive at least 50% of their annual revenue or operating activity from the development of quantum computing and machine learning technology. VanEck Semiconductor ETF (NASDAQ: SMH) The fund tracks the overall performance of the 25 largest US-listed companies that produce semiconductors, which act as the brains in numerous devices that we rely on today, including smartphones, calculators and computers. As technology improves and expands, these chips will invariably be in demand to help power new devices. Semiconductor ETF (ASX: SEMI) The Global X Semiconductor ETF seeks to invest in companies that…

BEST IN BREED Scott Phillips SECTOR TECHNOLOGY Technology is a funny word. It is, perhaps more than most sectors, a very relative thing. Resources are always – and always have been – resources. We might value some more highly than others at different times in history, but the term itself is clear. Ditto consumer staples, real estate and infrastructure. But what exactly is technology? We think we know, but at one point it would have included manufacturers of desktop calculators. Before that, photocopy machines. At an earlier stage, the motorcar was the height of technological innovation. And at the dawn of the industrial revolution, it was the Spinning Jenny that turbocharged the productivity of the textiles industry. In a couple of decades, we might not recognise the sector of today. And…

Alex Dunnin OUTLOOK The US banking crisis of 2023 is a salutary reminder of how important it is for every nation that wants to be taken seriously to have a robust and properly regulated banking sector. The US has just failed on both counts. In March, the US financial market was rocked by the collapse of two banks and one that teetered on the edge before a last-minute rescue. While it’s been the failure of Silicon Valley Bank (SVB) and its $272 billion in domestic assets that caught most of the international media attention, there was also the failure of the $155 billion Signature Bank and the voluntary winding up of the $16 billion Silvergate Bank. First Republic Bank, with $298 billion in domestic assets, was only salvaged when a…