Lifestyle Newsletter - 15 January 2010

PROFITABLE HOBBY – LANDSCAPE GARDENING

I received an email recently from Danny, who visited my office (with wife Linda) in May 2006 to discuss a strategy that would deliver to them 20-25 years of comfortable retirement.

They weren’t in a position to tuck another investment property aside, but they knew that they would be short, so I suggested that they take whatever hobby they had and turn it into a “profitable hobby”.

His email was to tell me that his hobby of landscape gardening (around their own family home) has now become – for the past two years – a niche landscape gardening business installing synthetic grass.

Well done, Danny and Linda.


WHY WE ALL NEED INVESTMENT PROPERTIES

About one third of men aged over 65 can expect to go into residential age care at some stage, and (because women live longer) it will be closer to half of women over 65 who will go into permanent care.

Now care is expensive – perhaps up towards $200,000 pa depending what level of comfort you want. But the government pays most of this, with the maximum fee to be paid by the resident is around $45,000 pa.

So if the rules remain as they are, and for a person in (basic) permanent aged care for ten years, someone will have to pay around $450,000.

Looking at it in another light, one person in aged care can equal one investment property.

So if you’re looking after fragile aged parents, you’ll need one for each of them - and another two for yourselves.

That’s four already.


UK EMPLOYEES BEYOND RETIREMENT AGE TO DOUBLE IN 10 YEARS

Results from research commissioned by Prudential among finance directors at UK firms found 24% of companies expect staff to work beyond retirement age in the next 10 years, with the proportion of people in the workforce who are past traditional retirement ages expected to more than double.

UK firms anticipate this will mean around 6.3% of their workforce will be made up of people working beyond statutory retirement ages in 10 years, more than double the current proportion of 2.6%

LOOKING FORWARD TO - WHAT - RETIREMENT?

Our parents taught us - years ago - to get a good education, a good career, save our pennies and look forward to a happy healthy and comfortable retirement.

That’s what they taught us.

But if you don’t think that things aren’t exactly turning out as planned, contact me – Bernard Kelly – and I can help you explore your options. My mobile is 0414 778 518 or just hit the return on this email.

THEME YOUR RETIREMENT

Although we can prepare extensively for travel in an exotic country, the onslaught of walking out of a foreign airport and being immersed in the cacophony of the local culture is usually totally unexpected.

However if we know what we want to achieve, an exotic county can become a fascinating place to be.

I think it’s the same with retirement.

My feeling is that if we know what we want to achieve in retirement, it can be fascinating.

So just don’t say “we want to travel” but be rather more specific - such as “we plan to see the seven wonders of the ancient world”.

Or if you want to spend more time with family, be specific – such as “we will take the grandchildren with us on an annual holiday”.

Or if you need to earn additional income, say “I’m going to write a series of books about my hobbies and sell them on Clickbank”.

My thinking is that if you “theme” your retirement, it will be far more fulfilling.

RETIREMENT ABROAD

More Americans are considering retirement abroad because their life has become unaffordable in the US due to the loss of purchasing power of their pension fund and soaring medical costs.

In some ways this is a pattern established by the British, who have traditionally migrated in retirement to the south of France and more recently to Spain, which is also a favourite destination of Germans and Scandinavians.

Now an article in Forbes Magazine 15 October 2009 “The Ten Best Retirement Havens” compared Austria, Thailand, Italy, Panama, Ireland, Australia, France, Malaysia, Spain and Canada based on a range of factors from visa requirements and taxation to the quality of health care.

It appears that there is no one perfect paradise, however it appears that Thailand is looking pretty good.

BOOMERS NOT SAVING ENOUGH

Wells Fargo, a major bank in the US, has just published its 5th annual retirement survey.

The results are surprising, but perhaps they shouldn’t be, human nature being what it is.

The bank surveyed their clients aged 50-59, and I was surprised to see that 57% of respondents were doing nothing different from a year ago.

23% are savings more, 20% are savings less, but the vast majority are doing nothing different at all.

However when asked “how much will you need?” and “how long will you live in retirement?” most said “at least $800,000 for 21 years” whereas on average the survey respondents have only saved $300,000 and life expectancy could well be 25-30 years, experts say. Oh dear.

Another disturbing issue that emerged from the survey – it found that the average retiree spends almost 10% of his/her retirement funds each year when industry professionals recommend you spend closer to 4% annually.

If you want me to help you explore your options before it is too late, contact me – Bernard Kelly – anytime on 0414 778 518. Or just hit the reply button to this email.

HOST AN IN-HOME SEMINAR

You probably know many people who need my experience and expertise right now.

Here’s the deal – you invite a few people over, and I’ll make a presentation about a strategy to prepare for retirement.

I’ll pay you $150 for your expenses, and a further $1000 for every participant who has me share an investment property with them.

About Bernard Kelly:

Bernard Kelly BEcon MBA CRPC Australia’s Retirement Strategist, is a highly sought-after advisor, retirement authority, thought-leader, author and radio commentator because he makes the complicated and mundane topics of investing and retirement fun! Bernard has over 20 years experience providing families with financial advice. He is the author of Live Your Dreams in Retirement, Property Investing for Couples, Goolwa by Breakfast and Raising Decent Kids into Substantial Wealth and publishes a fortnightly newsletter that reaches thousands of subscribers worldwide.