Friday, March 14, 2008

Lifestyle Newsletter 15 March 2008


Now this is an interesting question.

The answer is equally interesting as it relies on four elements – how much you have on the day you retire, whether it’s in super or property, how long you will live, and how much you intend to leave behind.

Let’s say you have $500,000 in super when you retire, that the “estate event” i.e. when you die is 17 years hence, and you plan to leave nothing to your survivors.

The answer is that you will be able to spend $36,000 pa.

However if you lived an additional ten years, this number becomes just $30,000 pa.

So on these assumptions, a 10 year increase in life expectancy will reduce your likely retirement income by 17%. The problem is of course knowing when to factor your “estate event” into your calculations.

Of course, if you have this $500,000 in super when you retire, your standard of living will be falling as the purchasing power of your income is not inflation protected. Heaven only knows what $30,000 as an allocated pension will buy when you’re 90.

Now $500,000 is really not enough for a dignified retirement of 20-25 years, but at least if your $500,000 is in property, you can expect that the purchasing power of the increasing rents that you will be receiving will ensure that you will be protected against the revenges of inflation. You may need to take out a bit less initially, however you will have a perpetual inflation hedge.

For good sound, logical reasons, I like property better than super. In particular, with property, it doesn’t matter when your “estate event” occurs.

Let me know if I can help you further explore your investment options.

Phone me – Bernard Kelly – anytime. Mobile 0414 778 518


A survey conducted by the Australian Psychological Society of 1500 respondents asked the question: Why would baby boomers want to continue working?

Naturally there was a high response for “the money”, but 50% said they wanted to continue because their work was satisfying, 50% said work keeps their mind alert, 46% said they feel valued at work, and 43% said they would miss the relationships that they have established.

A quarter of respondents are not planning not to retire before age 69, while another quarter are seriously thinking of opting out between 60 and 65.

reported in “The Courier-Mail”, 16 Feb 2008


The French national pensions authority – the Caisse Nationale d’Assurance Vieillesse – recently surveyed active retirees who had retired prior to age 65.

The question was “why did you retire early?”

The answers were mixed, however one interesting result was that only 40% were able to leave on their own terms. The others - fully 60% - felt that they had been eased out.

Employees who felt they had been eased out complained of the deterioration in their working conditions, the deteriorating business climate (lack of recognition and consideration, loss of a serene and friendly atmosphere generated by the race to the bottom and performance ...) and the arduous physical but also psychological work (stress, fatigue).

While there is growing, and widespread support by government, employers and colleagues to stay on, the report highlights traditional strategies to remove older workers are still prevalent. These include abolition of the job, and assignment of unattractive tasks.

Of the 40% who are able to elect to retire when it suited them, half were self employed business owners and self employed professionals. The other half were employees who had investments in place.

Employees with investments report that they are generally more relaxed about expected changes to the government pension, in comparison to employees without investments.


I was chatting recently on the phone with someone who may not be able to become a client, but who none-the-less needs to boost income for their retirement.

It turned out that this lady’s husband likes to do woodwork in their garage, so I suggested that this hobby could become a small business.

She was willing to explore this option, but how could they ever know what products to make, and what prices to charge?

I suggested that the answers to these questions are readily available on the web – at Paypal Shops.

To get some ideas of what products are viable, we went there and searched for something that a hobby woodworker could make – and we decided to search on “dolls’ houses”.

And we found that the range of product that is available from other hobby woodworkers who make “dolls houses” is quite extensive – including bird breeding boxes, wind chimes, train whistles, door stops etc. The list goes on and on and on.

And most items could be sold at a Sunday market.

So there is the foundation for a profitable hobby business.

Alternatively if your hobby is say, music, you could start an on-line business.

How? I hear you saying.

Once again, just go to Paypal Shops and type in “music”.

You could find something there that strikes your interest – personally I was quite intrigued with the on-line shop that sells sheet music (with the potential to link to other sites who will pay you a referral fee).

So go for it. Turn your hobby into a profitable hobby.


Bernard Kelly mobile 0414 778 518 cell phone 61 414 778 518

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