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 January 2009

Investment property at frame stage in Ipswich for a private client (right)




WHAT WILL HAPPEN NEXT

Now that the four horsemen of the apocalypse (Fear and Anger and Gloom and Panic) have galloped past to a distant paddock, some of their audience will now realise

(1) that not all financial institutions have gone broke,

(2) that equities will have to increase in value due to the need by superannuation funds to invest their billion dollar weekly inflows, and

(3) that the real estate still offers an excellent investment for retirement planning.

If you would like me to help you explore your options for 20-25 years of dignified retirement, contact me – Bernard Kelly - anytime on admin@retirelaughing.com

IPSWICH NEEDS 116,000 NEW HOMES BY 2031

The number of new homes in the Ipswich local government area will treble over the next 20 years if the Queensland Government's forecasts are right.

Its draft regional plan for southeast Queensland, released on 7 December, predicts that the Ipswich region will need 116,000 new dwellings by 2031.

Ipswich Mayor Paul Pisasale's reaction was to declare: "Bring it on."Ipswich wasn't ready 10 years ago, but we are now."The new regional plan, which will be open to public comment until April next year, proposes that Brisbane's western corridor be the area's next major population growth.

The state's new draft regional plan for southeast Queensland forecasts that 735,500 dwellings need to be built in the region by 2031, a 65 per cent jump on the current number of 1.1 million.

Source: The Courier Mail 8 December 2008


WHY YOU NEED A FUNDING STRATEGIEST


According to ratecity.com.au there are 1092 different mortgage loan products available from lenders in Australia.

Perhaps half of these would be “investment property mortgages” but there’s no way that anyone apart from an independent funding strategiest would know where to source them, and which one suits a particular investor.

If you would like me to introduce you to a funding strategiest at the peak of their profession, contact me – Bernard Kelly – anytime at
admin@retirelaughing.com


HOUSING PRICES WEATHER FINANCIAL STORM

HIA, Australia’s largest building association says the Australian Bureau of Statistics House Price Index for the September Quarter confirms house prices remained relatively flat during the period.

ABS preliminary estimates show the price index for established houses on a weighted average for Australia’s capital cities decreased 1.8 per cent in the September Quarter. This contrasts to 2007, when established house prices were up by 2.8 per cent.

HIA Chief Executive - Policy, Mr Chris Lamont said, the result is as expected and reflects the slowing in the Australian economy over the same period.

The result is a far cry from the 40 per cent fall in house prices some commentators were predicting just weeks ago.

Relative to other forms of investment, housing is doing very well. It is worth noting that while other classes of investment have seen reductions in asset value of 20 plus per cent the housing market has been shielded by, record levels of underlying demand for housing in excess of supply and population growth from immigration.

“There is no doubt that recent drops in interest rates and a top-up of the First Home Owners Grant will also help in putting a floor under house prices,” said Chris Lamont.

HIA has stated that a fall in asset prices should be expected during periods of economic uncertainty.

But a chronic undersupply of new housing, conservative lending practices and population growth mean that Australian house prices in an aggregate sense are unlikely to see the same turbulence affecting other investments.

“We remain concerned, that restrictions on the availability of capital are placing additional constraints on the supply of new housing particularly for higher-density development. Impediments to new housing supply have already placed considerable pressure on housing affordability and it is essential that capital is available to finance new housing projects,” said Chris Lamont.

RISKS WITH DEFENCE FORCE HOUSING

What attracts many investors to Defence Force Housing is the 10 year rental “guarantee”.

Of course, when you understand the fine print, what this “guarantee” really means is that DFH will only keep paying you the rent while they need your investment property to house defence force personnel.

If a base closes, all that local DFH accommodation will no longer be required. With a glut of houses for sale, investors won’t be able to exit, and of course there won’t be tenants to occupy all of those ex-DFH properties.

Now the Rudd government has commissioned an audit by the Boston Consulting Group to slash $2 billion from the Defence Department’s budget.

Late in the Howard years, there were proposals to close the Woodside Army Barracks in South Australia and the Richmond RAAF Base in New South Wales. These proposals could be readily reactivated.

A far better investment strategy is to avoid such obvious risks and only acquire investments properties in a growth corridor adjacent to a major, diversified economic zone.

If you would like me to help you explore your options, contact me – Bernard Kelly – anytime at
admin@retirelaughing.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