Saturday, August 01, 2009

Product Newsletter 1 August 2009

Cleared site in Brisbane's south west suburbs for an invesgtment property awaiting base to be poured (right)


a Chartered Retirement Planning Counsellor

Which – as you know - is what I have been doing for some time now.


The Australian Bureau of Statistics has reported that the cost of housing construction rose 1.4 per cent in the second quarter of 2009.

This is good news for investors as now both the supply side (i.e. builders) and the demand side (i.e. the shortage of housing stock) are pushing values higher.


Reason No 1

In Australia, the average savings is 5 cents in every $100 we earn. That’s just $40 per year if you’re earning $80,000.

But the good news is that we always pay our bills. So your contribution to an investment property is both and expense and a saving. It can’t get any better than that, can it?

So don’t work your entire life and end up with nothing!

Reason No 2:

Most of us people will retire somewhere around the age of 60-65-70 and as we are living longer, we can anticipate living a further 20-25 years.

Experts suggest that to maintain our standard of living, we’ll need an income of 67% of our final salary.

Consequently if you don't start investing today, you'll only make it harder on yourself to catch up.

Reason No 3:

Compound interest is magic. Compounding interest is a mathematical formula that increases the speed by which your money becomes more money.

In the residential property investment market, this translates to “it’s not the level at which you enter, but rather the time you stay in the market”.

Reason No 4:

You can’t foretell the future. Even “adequate funds in super” two years ago are today only worth half of what they were then.

And you never know when illness or injury will terminate the cosy expectation that life will continue for you, unchanged, indefinitely.


New research has unveiled that in order to live a comfortable retirement, Britons may find themselves working until they are 77 years of age.

According to fund management group, Fidelity International, the average UK annual salary is just over £25,000 and workers who want to retire on two thirds of their final salary but rely solely on their current employer contributions, at an average of £140 per week, will have to work until they are aged 77, assuming average stock market performance and 40 years of contributions.

Source: Finance Markets 21 June 2009


Historically, retirement planning was based on a three-legged stool model - a company pension (for the lucky few) the government pension, and personal savings.

But that retirement model has changed and company pensions effectively don’t exist now (because we’ve been changing our jobs all too frequently), our own 9% super contributions have been shown not to be enough, and the government pension is now in doubt as current funding methods are being forecast to drain the available resources by mid century.

All of this uncertainty means that you will have to take responsibility for your own retirement!
But you must move quickly because we’re all running out of birthdays. For many of us, retirement is ephemeral and scary, however it is inevitable.

Start planning your retirement now!

Let me help you explore your options. My email is and my mobile is 0414 778 518


Recent statistics show that, in the United States, four in 10 households aged 60 to 69 in 2007 have a mortgage and, of those four, two have enough investments available to pay it off, outright.

In other words, one in five households in this demographic cohort has a mortgage and will need to continue paying it well into retirement.

Presumably there would be a similar statistic for Australia.

If you would want me to help you avoid this calamity, contact me – Bernard Kelly – anytime. Just hit the return button on this email.