Lifestyle Newsletter 15 May 2009

PROFITABLE HOBBY – BECOME A WEBHOST

My friend CH retired nine years ago, after a career as a solicitor.

After two years he had become bored, but had started to go to computer swap meets, held on Sundays in a local hall, really only to fill in the day. He had really no knowledge of computers before that (but he did have a logical mind).

It gradually dawned on him that every website had to be “hosted” and realised it was a fairly easy to establish one himself – for his own hobby websites and for a few friends.

Not needing an income, he priced his services very low, and selected a name that would reflect this pricing, and found he was attracting clients who needed to host multiple sites.

Now – after only seven years – he has 7,000 clients but because everything is automated, it’s still a one person “hobby”.

But you do the maths. If each client pays him say $100 pa, that’s a lot of revenue for a one person hobby with little overheads.

His URL is www.budgethost.co.nz

WHY PENSION AGE IS BEING LIFTED TO 67

The pension age in Australia is being progressively lifted to 67.

While no detailed rationale is widely available, an annual report published by the US government in May shows what could happen there.

Because of the increasing cost of medical procedures and an aging population, it has warned that the American health insurance plan for the elderly (known as Medicare) will be insolvent by 2017 - two years earlier than predicted in 2008.

A separate fund for Social Security, their government’s pension plan, will be exhausted by 2037 - four years earlier than reported last year.

The demographics in Australia are broadly similar. Which is why we all need to tuck something extra aside come close to 20-25 years of dignified retirement.

Let me know if I can help you explore your options. My email is

admin@retirelaughing.com

RETIREMENT TAKES A LOT OF MONEY

AARP has just released a retirement planning video “Mission Retirement” to show Americans the importance of saving for the future.

Just about everyone’s mission is to retire comfortably some day. It isn’t impossible, but it will take work.

According to AARP, there are big holes in the security net of government welfare, therefore, it’s everyone’s responsibility to start early. In fact, the video mentions that to have an adequate nest egg you need to save 15% of your income each year for 40 years!

Go to www.aarp.org/finance

RETIREMENT OFTEN HAPPENS UNEXPECTEDLY

Retrenchment, a health problem, or the illness of a relative can derail

retirement plans in an instant.

This new survey of 1,200 adults between ages 40 and 79 found that the number of seniors who need or want to work during the traditional retirement years is rapidly growing, AARP Financial Inc. and Boston Research Group found.

About 433,000 unemployed Americans age 65 and older were actively seeking employment in February, more than twice as many as in November 2007, just before the recession began.

“This is a daunting economy for older people. A lot of older people are coming to see us that are scared or bewildered,” says Cynthia Metzler, president and CEO of Experience Works, a nonprofit organization that helps older people retrain for new jobs. “We have people who are in their 80s who are taking on new jobs.”

If you want me to help you explore your options – now – to enjoy your eventual retirement, contact me Bernard Kelly anytime. My email is admin@retirelaughing.com

RETIREMENT IQ TEST

The formula for a financially successful retirement used to be straightforward: Work for decades for one employer and then live happily ever after on the pension and whatever personal savings you were able to amass.

So the amount of savings was important but not critical.

Today, with superannuation vanishing and an economic crisis withering savings, it’s increasingly up to individuals to take charge of their finances to fund retirements that can stretch for up to 30 years because of longer lifespans.

Is your retirement IQ up to the challenge?

Take the test and find out. (Answers at bottom):

1. What percentage of your savings can you withdraw annually in retirement without risk of running out of money?
(a) 3 percent (b) 4 percent (c) 7 percent (d) 10 percent

2. Approximately what percentage of pre-retirement income is generally needed to maintain a person’s current lifestyle in retirement?
(a) 45 to 60 percent (b) 60 to 75 percent (c) 75 to 99 percent (d) 100 percent or more

3. Working full-time for three years past one’s anticipated retirement date and continuing to save 15 percent of salary could raise annual retirement income by how much?
(a) 7 percent (b) 12 percent (c) 17 percent (d) 22 percent

4. At what age will most of today’s workers be eligible for full pension retirement benefits?
(a) 62 or 63 (b) 64 or 65 (c) 66 or 67 (d) 70

5. What is the amount in a superannuation fund for the typical person aged 60 retiring today
(a) $87,000 (b) $147,000 (c) $247,000

6. The number of workers age 65 and over is expected to grow by how much over the next decade?
(a) More than 20 percent (b) More than 40 percent (c) More than 60 percent (d) More than 80 percent

7. What percent of homeowners age 50 to 65 plan to use home equity to finance ordinary living expenses in retirement?
(a) 6 percent (b) 10 percent (c) 20 percent (d) 50 percent

8. A job retrenchment in one’s 50s or 60s typically reduces total household wealth by what percent?
(a) 11 percent for married couples and 23 percent for single people (b) 16 percent for married couples and 28 percent for single people (c) 21 percent for married couples and 33 percent for single people (d) 31 percent for married couples and 43 percent for single people
___
ANSWERS:
1. (b)
2. probably (c) as it’s best to plan for the high side since health and medical costs are impossible to predict.
3. (d)
4. (b) if you retire today but it will soon be (c)
5. (a)
6. (d)
7. (a)
8. (c)

Acknowledgements: Star-Telegram.com 6 April 2009

Product Newsletter 1 May 2009

The beauty of property investing is that if this house has a market value today of say $400,000, you can reasonably expect that this value should double in 7-10 years. And if it only costs an investor $10,000 out-of-pocket, then the payoff is $390,000. Yippee!

FIXED INTEREST RATES MOVING UP

The bottom of the interest rate cycle has been reached.

While the cash rates are still expected to drop slightly over the next few months, the banks commenced the rise in fixed rates loans in the week ending Friday 24 April.

If you still haven’t locked in your facilities, don’t delay any longer.


INVESTORS’ CLUB - 14% OF TAXPAYERS


The Australian Taxation Office, in its report Taxation Statistics 2006-07, says that 13.6% of personal taxpayers own an investment property

So you are a member of an exclusive club, and investors collectively own one third of all housing accommodation.

There are 11.8 million taxpayers, so the membership of your club totals 1,600,000.

However many investors are just starting out, as only 17.5% of club members own more that one investment property.


RETIREMENT CONFIDENCE AT ALL TIME LOW

In the USA, workers and retirees have simply lost confidence in their ability to either fund a comfortable retirement or enjoy a financially secure retirement, according to the Employee Benefit Research Institute's 19th annual retirement confidence survey released in April.

Only 13% of those in work say they are "very confident" about having enough money for retirement, according to the survey. That's the lowest response since 1993, and half of the 27% response in 2007 -- just two years ago.

And almost half - 44% of all employees - are either "not at all" or "not too" confident about having a secure retirement.

Of those already retired, only 20% are very confident about having a financially secure retirement.

If you want help to explore options to avoid this nasty situation, contact me – Bernard Kelly – anytime. My email is admin@retirelaughing.com


HOUSING IS RESILIENT

Here are three paragraphs in a recent speech by Rory Robertson (Macquarie Bank's interest rate strategist) that might surprise you:"Between June 1990 and June 1992, full-time employment fell by 7%, and then took a full three years to get back to where it started. So, how far did home prices fall?

Actually, they didn't. Average house prices across Australia's state capitals rose - not fell - by about 2% per annum in nominal terms as that early-1990s recession and jobs disaster unfolded."It turns out that the downward pressure on home prices from shrinking employment in the early-1990s recession was more than offset by upward pressure on home prices from the halving of mortgage rates, from a record 17% in 1989 to 8.75% in 2003."I have no idea if average Australian house prices will fall somewhat or rise over the next five years.

“But those with their eyes wide open can see that sharply lower mortgage rates this time around - lower than most Australian home buyers ever dared to dream - already are having a strongly supportive effect on housing markets."

If you would like me – Bernard Kelly - to help you explore options to provide for your retirement via an investment property portfolio, contact me anytime. My email is admin@retirelaughing.com

Product Newsletter 1 February 2009

an investment property is a money tree (right), not a house


THE TIME TO INVEST IS NOW


You will appreciate that I am biased, and while I always maintain that “the time to invest is whenever you can afford the weekly contribution” circumstances right now are really exceptional.

When you put it all together, the reasons to be “quietly confident” and proactive are obvious: ·

Minimal out-of-pocket costs

Undersupply of housing

Record population forecasts

Rising rents

Low interest rates and further reductions in the pipeline

Tax minimization

Long term capital growth

Security of ‘bricks & mortar’

Tax deductible insurance against involuntary loss of income



In addition, property values have been increasing ever since records began.

We’ve had world wars, depressions, interest rates at 22% - and you know what - after every pause, values have continued upwards. Remember that speculators rely on timing, investors rely on time.


The time to invest is now, because in 7-10 years time when according to statistics (and I can’t see the long term trend line altering) each your investments are likely to have doubled in value.

In ten years time, what happened in 2008 will be of little significance.

All you have to do is contact me – Bernard Kelly – admin@retirelaughing.com and I’ll help you explore your options.


WHAT WILL IT COST YOU TODAY

I have been running spreadsheet numbers recently on the basis of interest at 6.5%

For a “average” couple earning $60,000 plus $25,000, it would cost them $110 per week in the first year to have their names on the paperwork for a house and land package priced at $380,000.


Of course, in the real world, with increasing rent, that couple would only ever have to contribute half of that – say $55 per week, and probably only for four years.

So it’s theirs for just $11,440 plus the $1000 deposit i.e. $12,440.

Yes – you read it correctly. $12,440 over four years.

And the funding advisors that I am in contact with say even 6.5% is perhaps 0.5% over what most transactions have been done at over the last few months.

Be that as it may, I prefer to be conservative.

However, image what the investment contribution for this average couple becomes if rates fall another 1%.

When I now run the numbers for this couple at 5.5% - I’m not going to be tempted to use 5.0% - their contribution would only be $57 in the first year, so their contribution would be $28.50 time 52 times 2 years i.e. just $2,964 plus the $1000 deposit.

Yes – you read it correctly. $3,964 over two years.

And then they will sit back, and in ten years time -if history repeats itself as it has since records began - they’ll be saying “back then in 2009, we really should have bought TWO”

If you want me to run the spreadsheet numbers for your income, feel free to contact me – Bernard Kelly - anytime. admin@retirelaughing.com

WHY SHOULD YOU ACCEPT MY LEADERSHIP?


First time clients often say – how do we know it will work?

My response is that investors only need to reflect on what they paid for their own home – and what their children might have to pay in the years ahead – to recognize that residential property is expected to continue to increase in value.

What I bring to the table is wisdom, experience, research, logic, and efficiency.

My concept of professional investing is “least in, most out” with 105% funding from local Australian banks (depending of course on their valuations).

You only need a $1000 deposit to start. I show you (and your family) how to invest with maximum efficiency.

We have developed a clinical and scientific approach to property investment and we were delighted early in 2007 when we received a testimonial (from America): “You are the only rational source of information in your market”.

Our method totally ignores emotion, and has its focus solely on the expected financial return.

My practice is based on long term relationships, repeat business and personal referrals.

And none of that happens if clients are not totally at peace with the first investment that I share with them.

And I’m happy to share with you.

Phone me anytime 0414 778 518


PROFITABLE HOBBIES


Most of us will not have enough for 20-25 years of dignified retirement, but I have come to realize that many a micro-business has started from a household hobby.

And many profitable hobbies can be continued into retirement, providing extra income.

To learn more, go to http://www.hobbiesforprofit.com/

Lifestyle Newsletter 15 May 2008

TOTAL REVAMP OF WEBSITE

We have totally revamped our website at
www.retirelaughing.com

Such is the pace of technology today, that after only four years, the old site had become dated. So we pensioned it off and installed a total new look – now all of our services are in one place.

Go see. www.retirelaughing.com


BOOST YOUR INCOME

If you are short on income in your retirement, you could consider hosting an international student.

Companies such as www.familystayaustralia.com will pay you $200+ per week per student.


LIVE BETTER – START A STUDY PROGRAM

I have just come across some research1 completed in 2001.

In brief, a research project was established involving 300 elderly subjects (median age 80). 150 were given a structured creative arts educational program and the other 150 merely followed as a control group.

The results showed significantly better overall health, diminished use of medications, diminished vision problems and a general increase in "intelligence" for the ones receiving the additional education.

Modern studies are teaching us that there is no doubt that education can be regenerative.

So I’m off to my creative arts program right now.
1 “Creativity and Aging Study: The Impact of Professionally Conducted Cultural Programs on Older Adults” by Gene Cohen, M.D., Ph.D., Director, Center on Aging Health and Humanities, George Washington University

FIRST WEB-TV DEDICATED TO "YOUNG AGE"

www.longeviTV.com is a French web-TV site promoting longevity.

It recommends taking precautions in terms of education, nutrition, physical activity, intellectual activity, or volunteer work, leisure, and lifestyle.

They say it is indeed proven that all these aspects play a major role in our health: an inactive person has a mortality rate five times higher than an active person.

"It is never too early to start, it is never too late", says their promotional brochure.


(if you want the translation, type "longeviTV" into Google, and then - when it appears - click on "translate this page")

HIGH PROFILE INVESTOR

Matt Brown, 36, the NSW Minister for Housing, owns 14 properties


TRIVIA - 9 January 1921 Independence Day Australia


Most Australians consider January 1st 1901 as the date when Australia became an independent nation.

But in fact Australia (along with Canada, Nova Scotia, South Africa and New Zealand) were granted independence on 9 January 1921 by an Act of the British Parliament “in recognition of services to the Empire during the Great War”.

What happened in Australia on January 1st 1901 was that each the six colonies were united to become one self governing colony, known as “the Commonwealth of Australia”.

Independence was still 20 years away


Until next time

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

Your greatest compliment is a Personal Referral

Product Newsletter 1 April 2008

Pouring the Slab at an Investment in Goodna Heights, in the south west suburbs of Brisbane, that I shared recently with a private client.

POSITIVE EXPECTATION


Tim Lawless, research director of RP Data, writing in BRW 21 February said

“Queensland’s south-eastern corner is the pick for the strongest medium-term growth.

“In addition, the state economy is growing at the second-fastest rate in the nation, the resources sector is booming and population growth in the region remains high.

“Growth in Brisbane will slow to more sustainable levels this year, but is likely to remain above 10 per cent over the next 12 months at least.”



WHAT IF THE ECONOMY CRASHES?


I was recently asked “What if the economy crashes?”

My reply was along the following lines:

“Thanks for voicing your reservations – if you didn’t have some concerns then I’d be reaching out to take your pulse to see that you’re still with us.

“You must remember that property investments are for the long term – you told me that you have only $100,000 in super. So you should consider putting one in place now, so that in five years - when you come to retire – you will have at least one running for you. Then if you live off your super for two years, then an investment – one that a family would pay say $400,000 today to live in – should be well in excess of that value.

“Since records began, property has increased three times in every 21 years. Which is why the commentators say ‘property doubles every seven to ten years’.

“And if you have ever thought ‘how will young couples ever be able to afford a family home?’ then you too know that property values increase over time.


“Over this past 150 years, there have been depressions and recessions, world wars, 22% interest rates, change of governments, financial meltdowns, stock market crashes, you name it. Even the impact of the ‘recession that we had to have’ in 1991 only lasted four years before property values exceeded what they were in 1990.

“Don’t let the current crop of bad news distract you from taking action to ensure some form of dignified retirement.

“I know it’s a watershed moment for you – but whether you invest, or if you don’t, there is definitely a foreseeable outcome either way. Destiny is a matter of choice, not chance.

“Which outcome would you prefer?”



WHY YOU NEED A FUNDING STRATEGIST


Banks are in the business of lending money. They are not in the business of helping you put something extra aside for your retirement.

So they try to tempt you with “the lowest interest rate”. Unfortunately, as an investor, you will find that generally such loan products won’t let you make extra repayments nor will you have an offset account.

The same goes for “honeymoon rate” loans. The banks don’t give money away, so after the initial honeymoon period you’ll be paying a high variable rate, and there will be solid penalty exit fees if you try to go to another lender. They will make the same off your loan – over time – as off every other client’s facility.

The only way to obtain the best package is to talk with a funding strategist.

I can introduce you to a funding strategist at the peak of their profession.

Phone me Bernard Kelly anytime on 0414 778 518 cell 61- 414-778 518



COMMITMENT TO PRIVATE CLIENTS

The average investor can’t tell if my solutions are truly exceptional or just so-so.

But I believe so strongly in this proven and successful strategy, I am prepared to share the risk with you. And it’s this:

· Provided you follow my strategy, if you ever are without a tenant for more than four weeks at any time in the first three years, then I will pay you 85% of the initial rent from week five onwards.



LIVE ON-LINE VIDEO

I have put my seminars on-line.

There are ten clips, each of three minutes. Together they cover the full content of my live seminars that I deliver around the country.

You can see them on you-tube. Just go to http://www.youtube.com/ and type in “Bernard Kelly”



Regards


Bernard Kelly http://www.retirelaughing.com/ mobile 0414 778 518 cell phone 61 414 778 518


PS As I don’t spend my advertising budget on traditional media, I’m able to pay you $1000 for successful referrals

I would be delighted to be your personal financial coach over the next five years and share a strategy that will dramatically reduce your learning curve.

Lifestyle Newsletter 15 March 2008

HOW MUCH CAN YOU SPEND IN RETIREMENT?

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


BOOMERS WANT TO KEEP WORKING

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


ONLY 40% OF WORKERS CAN CHOOSE WHEN TO RETIRE

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.


TURN A HOBBY INTO A PROFITABLE HOBBY

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.


Regards


Bernard Kelly www.retirelaughing.com mobile 0414 778 518 cell phone 61 414 778 518

Product Newsletter 1 March 08

Our goal – helping you from zero investment properties to ten.



WHY BRISBANE VALUES WILL REMAIN BUOYANT


Investors can remain confident that capital growth in our preferred suburbs in Brisbane (adjacent to the south west economic zone) will remain strong for the foreseeable future.

The underlying issue is that Australia – as a nation – builds only 150,000 new dwellings each year, compared with a need of 180,000. This is referred to as a “two month shortfall” i.e. we are short one sixth of what we need.

In contrast, the United States has a “nine month oversupply”. This caused the sub-prime crisis.

So my feeling is that it’s totally different here in Australia.

In November, the Housing Industry Association forecast that the housing backlog will continue to swell for at least two more years in south east Queensland, before easing.

Of interest, what actually happened in the US was that builders kept building too many homes, so they had to move them. Their solution was to leave behind a notional deposit – look up “down payment assistance programs” on Google - so that borrowers who could not normally afford to borrow, appeared to have a cash deposit.

So the banks lent them the balance - but these “economically challenged” borrowers couldn’t service even those loans, and as borrowers in the US can walk away from home mortgages without penalty, the crisis simmered along, and finally erupted.


EXPECTED GROWTH OF YOUR PORTFOLIO

The biggest assumption that we make in property is that it will double every 7-10 years. This assumption is based on many, many years of recorded property prices.

In fact if you consider that property will double every 10 years then it means it must grow on average at 7.5% per year. This is considering that it only doubles every ten years. For it to double every 7 years it would need to be a huge 10.5% compounded.

Now in truth property does not grow at 7.5% each year, every year. The property cycle affects the rate of growth in any particular year.

If we factor in the effect of the property cycle over the past 50 years we will find that it has doubled every 7.3 years and that there are three full property cycles each 21 years.

Now within those packets of 7.3 years it will normally decrease or stagnate one year, grown at between 2-5% for 3-8 years and best of all grow between 10-25% for between 2-3 years. Obviously we all wish every year was a 25% growth year but there's no way that the market could sustain itself compounding at those rates.

It's being armed with this basic knowledge we can safely and confidently build a portfolio knowing it will double at some time in the not-too-distant future.

I enjoy using this statistic like this – I might say when I meet with private clients for the first time “if your home is worth $500,000 today, then when you bought it 14 years ago, you must have paid something like $125,000. Am I right?”. They generally express amazement and say “How did you know?”


STATISTICS CAN BE CONFUSING


If you have ever seen – sometimes in the same newspaper on the same day – different values for the current medium price of housing in your city – you have a right to be confused.

The reason is that there are six different sources, and each uses a different survey technique, or different geographic boundaries, or different time periods, or different dwelling types.

The six providers are the government’s Valuer General, the state real estate institutes, and private providers RP Data, Residex, Australian Property Monitors and Adviser Edge.

There are difficulties with each source. For example the Valuer General uses rates notices, which of course don’t reflect market values. The real estate institutes use data which is supplied by their members (not all real estate agents are members, and perhaps only two thirds of those members provide data) and typically these figures do not reflect the sales of new homes as they are generally sold by developers and builders. RP Data develops its results off a database based on the number of bedrooms, land size, location and dwelling type.

However you know yourself that values keep doubling every seven to ten years. If you don’t believe that, ask yourself if you have ever expressed concern about how your own children will ever be able to afford to buy their own family home. We have all done that, as did our own parents.

We all know property prices continue to move up.

If you don’t have enough for 20-25 years of dignified retirement, let me help you explore your options

Phone me Bernard Kelly anytime mobile 0414 778 518 cell 61-414 778 518