AVOID ANY RELIANCE ON GOVERNMENT WELFARE

The consultation paper on retirement incomes – as part of the Henry review into the tax system – notes that there are now five people of working age for each person over 65.

However by 2047, this ratio will fall to only 2.4 persons.

The consequence of having relatively more of us retired and less of us in the workforce will mean that the cost of the age pension will increase from 2.5% of the gross domestic product to 4.4%.

In addition there will be larger demands by the health sector to pay for the ever increasing cost of caring for an increasingly older population and ever increasingly costly medical equipment and drugs.

The economy will simply not be able to sustain the pension as we currently know it.

A likely scenario is that we will only have access to the pension, and the Pharmaceutical Benefits scheme etc., once we have exhausted our super.

So plan now to avoid any reliance on government welfare, as it may not be there when you’ll need it.

If you would like me to help you explore your options for 20-25 years of dignified retirement, contact me – Bernard Kelly – any time on admin@retirelaughing.com

WHY I DISLIKE DEFENCE FORCE HOUSING

What attracts many investors to Defence Force Housing is the 10 year rental “guarantee”.

Of course, when you understand the fine print, what this “guarantee” really means is that DFA will only keep paying you the rent while they need your investment property to house defence force personnel.

Investors still recall when the RAAF base in Bairnsdale, Victoria, was closed, all those local DFA homes were then no longer required. With a glut of houses for sale, investors couldn’t exit, and of course there weren’t tenants to occupy all of those ex-DFA houses.

Now the Rudd government has commissioned an audit by the Boston Consulting Group to slash $2 billion from the Defence Department’s budget.

Late in the Howard years, there were proposals to close the Woodside Army Barracks in South Australia and the Richmond RAAF Base in New South Wales. These proposals could be readily reactivated.

A far better investment strategy is to avoid such obvious risks and only acquire investments properties in a growth corridor adjacent to a major, diversified economic zone.

If you would like me to help you explore your options, contact me – Bernard Kelly – anytime at

admin@retirelaughing.com

IPSWICH NEEDS 116,000 NEW HOMES BY 2031

The number of new homes in the Ipswich local government area will treble over the next 20 years if the Queensland Government's forecasts are right.

Its draft regional plan for southeast Queensland, released on 7 December, predicts that the Ipswich region will need 116,000 new dwellings by 2031.

Ipswich Mayor Paul Pisasale's reaction was to declare: "Bring it on."Ipswich wasn't ready 10 years ago, but we are now."

The new regional plan, which will be open to public comment until April next year, proposes that Brisbane's western corridor be the area's next major population growth.

The state's new draft regional plan for southeast Queensland forecasts that 735,500 dwellings need to be built in the region by 2031, a 65 per cent jump on the current number of 1.1 million.

I'm Bernard Kelly http://www.retirelaughing.com/

Source: The Courier Mail 8 December 2008

SUPER INADEQUACY FINALLY ACKNOWLEDGED

Politicians have finally acknowledged what most of us have known for some time – it will not be possible for superannuation to provide us with an adequate income for 20-25 years of dignified retirement for the vast majority of us.

Which is why I have been urging my private clients to build a portfolio of investment properties.

When the Australian Government announced the review of Australia's tax system in May 2008, the review was to look solely at the current tax system and make recommendations to position Australia to deal with the demographic, social, economic and environmental challenges of the 21st century.

This study – the Henry Review – was to consider (among other topics) the tax benefits afforded to superannuation, but now the terms of reference have been amended to provide for consideration of the adequacy of existing superannuation arrangements.

Of course the Association of Superannuation Funds of Australia have long advocated that the employer contributions should be 15%, and the major wealth management company AMP now believes that a target for “adequacy” is 65% of an individual’s pre-retirement living standards.

COTA Over 50s – reflecting the less affluent socio-economics of its membership base - has long advocated a retirement incomes system based on the actual cost of living in modest circumstances commensurate with contemporary Australian standards. A pension of 35% of male total average weekly earnings seems a good place to start, they say.

However none of these institutions have the solution to outliving our wealth, and inflation-protecting our income in retirement.

Which is why investment properties are so attractive.

If you would like me to help you explore your options, feel free to contact me – Bernard Kelly – anytime on admin@retirelaughing.com

an investment property about to welcome its first tenants

OLD v. NEW – the $100,000 DIFFERENCE


A private client recently asked “with home prices falling, shouldn’t I take advantage of lower prices?”

My response was along the lines “certainly – if you can find a suitable investment $100,000 below the price for new”

Let’s say that to attract a suitable tenant into an established house, you’ll need an investment that’s not too old, say ten years old.

It works this way – if you purchase existing housing stock, you’ll pay full stamp duty – that’s $10,000 extra.

Then the difference on the depreciation on a house ten years old compared to one off-the-plan today is probably $40,000.

Then repairs and maintenance during the next ten years could well be $50,000 for an investment already now ten years old, compared to virtually zero for an off-the-plan investment during its first ten years.

That’s the $100,000 difference.

So if I offer you an investment today for say $380,000, to be better off you’ll need to find something that will attract a suitable tenant for less than $280,000. That’s quite an ask.

And you’ll also miss out on the research and packaging – which regional market will be best over the next five years, and my introductions to an investment- aware funding strategist, to an investment-aware property solicitor, to an investment-aware property accountant, to an investment-aware insurance broker and to an investment-aware asset manager.

And now with lower interest rates, an investor on $70,000 will only need to outlay $28,800 over the next six years to be in full control of this $380,000 investment.

If you would like me to explain in more detail, contact me – Bernard Kelly – anytime on admin@retirelaughing.com

PRESERVE YOUR NEST EGG

How long will your savings last?

By Robert Brokamp of The Motley Fool

There you sit with a finite pile of savings from which you will need to take all or most of the money to support your retirement spending.

The accumulation phase of life is nearing an end.

How much of that stash can you safely take each year to ensure it lasts your lifetime? Will you take the same amount annually? Or will you just buy all the cool toys and vacations you've always really wanted, and let your slightly older self deal with the fallout a few years later?

All of these questions boil down to one over-arching theme that we've thoughtfully put into this question: How long will your money last?

The "70% to 80%" rule of thumb is based on the assumption that many of your current expenses will go away in the golden years.

For the most part, this is true. Once you kiss the boss goodbye, you'll no longer endure the following:
Work-related expenses,
Social Security taxes
Contributions to retirement plans
Mortgage payments, (if your house will be paid off)

There are two other ways your expenses might decline.

First, retirees tend to downsize – but the savings might not be there.

With no need to keep the four-bedroom house now that the kids are grown, for example, some pensioners flee the big house for the something smaller. However the cost to move into – and maintain – a new home or retirement village can still be quite expensive.

However, some require the same level of income in retirement they enjoyed while working.

How? It comes down to this: If you're not making money, you're spending money, particularly in the early retirement years.

Another big expense is health care.

A survey in the Journal of Gerontology found that 61% of couples age 70 and older and 54% of single adults spent at least 10% of their retirement savings on health care. A startling 45% of couples spent more than half of their savings to medical bills.

Medical insurance is not free (there are on-going premiums), and it doesn't cover everything (e.g., most long-term care).

The real price of leisure

So what will retirement cost you?

The best research we've come across concludes the following:

A "safe" withdrawal rate ranges between 4% to 6% of a retiree's starting portfolio.

The accuracy of that approximation depends on your age. If you're 65, then that estimate is quite accurate; if you're 25, thankfully you have many decades to improve your lot.

CONCLUSION

But the simple answer to all of this is – if you want an income of $50,000, this equates to 5% of $1,000,000. And only a portfolio of residential real estate is inflation protected.

Let us help you calculate what you can expect (and what you'll need!) when you retire.

Contact me – Bernard Kelly - anytime at admin@retirelaughing.com

SUCCESSFUL PROPERTY INVESTING

Lance Winslow writes:

Despite what you might think success is never an accident.

Oh sure, you might have some luck along the way that puts you in a nice situation for a while, but it's not long term.

Success is achieved by those who capitalize on their luck and reduce their risks or turn-around their failures and challenges.

If you look at some of the most successful folks in the world, you will realize that they often came from nothing.

Many were orphans and didn't even have a pot to use for their bathroom needs. But how can this be, how is it that someone can have such bad luck and turn all that around and become successful?

Simple, because success is never an accident, many of these people because they worked hard, they had no choice, it became a habit and they just never stopped once they achieved a comfortable lifestyle.

Working hard, working smart, making lots of friends and never giving up were just part of who they are.

These same elements of success are available to everyone, even if so many people choose not to accept these principles.

After all, we have free choice, free will and we live in a free society.

You are allowed to succeed beyond your wildest dreams or fail, but it is your choice.

Success is no accident, no one I know is successful over the long-haul without working to attain it.

No one should feel guilty for being successful, just like no one should make excuses for choosing not to be successful.

The fact is that it is up to you, so please consider this.

If you have innovative thoughts and unique perspectives, come think with Lance; http://www.WorldThinkTank.net/.

Bernard Kelly http://www.retirelaughing.com/

INVESTMENTS TO AVOID

Occasionally I’m told “Those south west suburbs of Brisbane are so far away. I’d prefer to buy an investment locally – so that I can inspect it at any time”.

That’s fine by me – if a prospective clients wishes me to help, I bring my years of professional expertise into play, and do my utmost to achieve an outstanding result for them. But if they want to do it on their own, I’m not upset (except when they ring me a few years later and say “we really should have listened to you.”)

Over the years I have learned that a genuine investment decision is based on an analysis of the numbers – nothing else. There is no place for emotion in any form of serious investing.

And the fact is - once you've acquired an investment, very rarely do you ever visit it again.

My focus is on helping my private clients retire with more. And in my years of experience, there is nothing that can compare to the benefits of investment properties for late career couples who have inadequate retirement funding.

The formula is: who is the Ideal Tenant? what do they want to live in? how much can an typical investor afford?

These questions guide us to the Product.

Then we ask: where should the Product be located?

The answer combines 1) a growth corridor 2) where rents are higher 3) where land tax is lower 4) close to a major cluster of jobs.

The Conclusion - an off-the-plan four bedroom home in the south west suburbs of Brisbane is the ideal investment property for you.

Other forms of property investment – and other locations - carry hidden problems that investors should best avoid.

In particular, I would mention that we do not normally share with private clients investments that are

· Existing housing stock
· Inner city apartments (either high rise or low rise)
· Serviced offices or serviced apartments
· Student accommodation
· Cluster housing and/or gated communities
· Defence Force housing
· Locations distant from a capital city
· Factories or commercial office space
· Postcodes that the banks dislike
· Locations dominated by one industry e.g. mining, tourism
· Suburbs not adjacent to a major economic zone

as each of the above “opportunities” carries hidden problems which slow the accumulation investment program, and consequently are not as attractive as a brand new stand-alone family home in an established suburb in a growth corridor adjacent to a major and diversified economic zone (i.e. where the jobs are).

Let me know if you disagree. Simply hit the reply button on this email.

Or email me – Bernard Kelly – admin@retirelaughing.com

IPSWICH TO REVIVE INNER CITY

The good news for my private clients – and other residential real estate investors who target Ipswich – just keeps getting better.

Now the Ipswich City Council has purchased the major – but outdated – Ipswich City Square Shopping Centre and will guide its redevelopment.

Built over 30 years ago, the Centre has been neglected by its owners, and has suffered badly with competition from the new RiverLink shopping centre, just across the Bremer River.

The Council will plan the redevelopment, and will call for tenders to complete the works. It will not become the developer itself.

When completed in four years, the site will be able to accommodate 10,000 workers in high rise buildings, as well as both retail and commercial space.

Ipswich has 43% of all industrial land in south east Queensland, and experts predict that the surging support sector will ensure that this development will be a success.

If you want me to help you explore options to expand your investment portfolio, contact me anytime via email: admin@retirelaughing.com

PROVEN WAYS TO INVEST IN PROPERTY

Many people agree that buying property is an excellent investment. However not many know where they should start or who to turn to for investment guidance.

Then there are those who fear doing the wrong thing and end up doing nothing. In light of this hesitant attitude, here are a few tips and property investment advice that would help you embark on your investing journey with confidence.

Firstly - why property investment?

Property investment remains a popular alternative for many people who consider it a stable and conservative investment vehicle especially in the long term.

Investing in property is seen as a route by which: income returns can be produced throughout the period of possession; relatively safe capital gains can be earned on an eventual sale; and mortgage finance is covered in repayment terms by the security of the eventual property sale and by the rental income in interest terms.

Different factors contribute to the growth of property investments. These include: huge population growth, increasing migration, slow government housing policy that results in chronic undersupply of housing, rising numbers of single households, and a mobile labour force that demands short term accommodations to meet more flexible needs.

All these issues are expected to sustain and boost average property prices and step up the need and number of rental properties in the coming decade.

I share residential investment properties with my private clients that match all of these requirements, and then package them so that they can be certain of “least money in, maximum money out”.

My focus is on assisting you achieve 20-25 years of dignified retirement.

Contact me – Bernard Kelly – anytime via email: admin@retirelaughing.com

NSW LAND TAX WILL RISE

Because the economic difficulties faced by the government of New South Wales are increasing, it is casting about for more revenue streams.

Now the Independent Pricing and Regulatory Tribunal has thrown the government a lifeline.

The Tribunal’s view is that stamp duty is one of NSW’s “most inefficient taxes” and the state should consider boosting revenue from a more efficient tax - land tax.

Now you can see what is about to happen. Yep.

You don’t have to be very bright to realise that land tax in NSW will soon increase.

Which underscores the value of the investment strategy that I share with my private clients.

If you don’t have enough for 20-25 years of a dignified retirement, I can help you explore your options.

Contact me – Bernard Kelly – anytime via my email admin@retirelaughing.com