Monday, February 28, 2011

Property Strategies 1 March 2011


Today's Inspirational Quote – with relevance to property investing and retirement planning:

"Time is free, but it's priceless. You can't own it, but you can use it. You can't keep it, but you can spend it. Once you've lost it you can never get it back."

-- Harvey MacKay (author of five business bestsellers, including Swim With the Sharks Without Being Eaten Alive)


Not so long ago the talk was about the disaster that property investing was in both the US and the UK.

We still see articles in the general press about the US housing market (but nothing specific mind you) but similar stories about the UK have all but disappeared.
The explanation is simple - the UK housing market has gone back to a “normal” growth phase, now that the banks have addressed the Global Financial Crisis, and are lending again.
The website is looking to attract clients by playing on their emotions, however their basic premise is that property is the way to “rescue your pension”.
The site contains a graph showing UK property prices over the last 40 years. The message is if you had bought at any time in the last 40 years and held on to your property for at least 10 years not only would have you made a profit, your property would have doubled in value.
The message here is that you don’t want to be bogged down with lingering negative impressions that have been hammered at us by the daily media. This UK story is just another example that the media doesn’t report the good news.
If you want me to help me explore your (retirement planning) options, feel free to contact me – Bernard Kelly - anytime. Just hit the Reply button to this email

Jeremy Cooper, who headed last year’s government’s superannuation review panel, says that the reason why the average return for super funds of just 3.3% over the past ten years is that there is too much reliance on the stock market.

In addition to that, when retirees draw their “allocated pensions” during a market downturn, they are taking proportionately a greater annual distribution, which they cannot replace because they are no longer working.
Cooper says there are fundamental design and structural problems with super.
The whole superannuation regime needs a radical and comprehensive overhaul to be able to deliver on its promise of providing financial support for people in later life.
Source “Equities roller-coaster a drag on super” Australian Financial Review 22 February 2011

This is a key question in retirement planning, but one that is addressed all too infrequently.

Ignore any commentary on life expectancy – 79 for men and 84 for women – because that relates to a child being born today.

For you and me, we need to look at the probabilities – for example, a woman aged 60 has a 52% probability of living to age 90 and a man aged 60 has a 37% chance of living to that same age.

Back in 1971, there were only 200 centenarians in Australia – now there are 4,000. Not only have there been improvements in health, but as we have become a service economy, our bodies do not suffer physically as they did for our forebears.

So we can expect that our longevity will continue to increase.

Do you have enough to be comfortable until your “estate event” occurs? New statistics are emerging – courtesy of the Association of Superannuation Funds of Australia – that 84% of us could quite possibly be facing years at or below the poverty line.

If you have any concerns whatsoever about your long term financial security, contact me – Bernard Kelly – anytime. My email is


As I’m active in the field of retirement planning (but more particularly solving the issue if you don’t have enough) I often come across some common platitudes that deserve comment.

Here are three:
1. You will spend less in retirement.
Many people in full time work, late in their careers, spend more money on the weekend than during the week – simply because they have more time to spend, and grandchildren to pamper.
When you retire, everyday can be like the weekend and unless you find part-time work or volunteer opportunities, you may be tempted to go out and spend just to escape the boredom of sitting around the house.
2. You should shift to cash and other conservative investments
If you retire at age 65, you can expect to still have another 25 years before your “estate event” occurs.
So you should still be investing as you would be at age 40 – for growth. At age 65, you should still be focusing on creating a corpus to fund your lifespan.
3. You don’t need to budget in retirement.
When you retire, unless you have investment income – from equities or investment properties - you may not be able to do much to influence your income, and that’s why you have to watch your spending even more carefully.
Alternatively, you could start a “profitable hobby” to give you some disposable income.
If you want me to help you dissect other common platitudes, contact me – Bernard Kelly – anytime. My email is

There is a worldwide trend to increase the retirement age, and for good reason – governments can’t afford to pay their citizens what it paid their parents.

Part of the reason is that we are all living longer, and part of the reason is that health care costs (largely paid for by government) continue to balloon.

And then governments of all persuasions continue to find more expenditure items – the environment, climate change, defence, sport, public entertainment, regulatory authorities and tourism (to give just a few examples) are far more expensive now than previously.

Something has to give and while “the pension” will doubtlessly survive, it will probably be in name only – and will be as accurately described as breakfast cereals are (I’ve often asked myself what exactly is “Sustain”?)

My prediction is that the pension – as we know it today – will only be available to the extremely needy. Which doesn’t apply to anyone reading this newsletter. You’ll need investment properties.

If you want me to help you explore your options for 20-25 years of comfortable retirement, contact me – Bernard Kelly – immediately. My email is


You can now buy my manual “37 case studies of Profitable Hobbies for immediate application” at
At $19.75, it’s excellent value if you think you’ll be needing an additional source of income at some stage.

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

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 thought. 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.
19 Prospect Street, Box Hill 3128 Australia. Tel 61-3-9899 8577 mobile 0414 778 518

“expect to reap an extra $449,999* when you’ll really be needing it”.

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Following my own advice, I have now established my own “profitable hobby” – a webhosting service. Go to

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