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You are a thief! | April 2017 eBulletin Introduction

You are a thief!

You are a thief for potentially wanting to assist yourself and your family in their future comfort.

You are a tax cheat for taking actions which assist in providing housing for many other Australians.

You are a wealthy bludger living on the misgivings of first home buyers.

Apparently taking the risk and responsibility to provide for yourself in retirement is thievery.

For strongly supporting the development and construction industries and the economy generally by doing what you do, you should be ashamed!

Well… at least that’s what the shock jocks would have you believe.

Traditionally shock jocks are most often associated with commercial radio stations. Sometimes, they’re associated with other private media outlets which have been seen to be less than balanced – a status sometimes deserved.

However, you would hope that similar shock jocks do not exist in the tax payer owned media outlets (ABC, SBS, plus, plus). These outlets are meant to be represented by those supposedly politically balanced and reasonable individuals, right?

Surely these government paid presenters are individuals with fair mindedness and intellectual superiority (definitely you’d think this while listening to them, that many believe this of themselves)?

However, so often they and the other club members of their organisations shove their black or white, often politically left opinions at their employers, the Australian citizens. And in this way, we find ourselves with tax-payer funded shock jocks.

Whilst Jon Faine (among others) is obviously very intelligent, educated, experienced, often caring and sometimes respectful to his interviewees, I do not believe that he represents you, the genuine long term property investor for what you are (or hope to be).

It is sickening and disheartening for many in your position to have it inferred that you are any and/or all of these things. A thief, a bludger, a cheat.

Frankly, I am disgusted with the way certain politicians and certain sections of the media represent individuals that reasonably and genuinely claim tax deductions for purchasing appropriate long term negatively geared property investments.

Shooting at you as a selfish greedy person for doing what you can to provide for your, or perhaps your family’s, future is unjust. It certainly suits many politicians and media people to do so, but you should not accept this as punishment for being an informed investor.

It is a disgrace not to applaud you.

It is political convenience and shock jock rhetoric to appeal to the many. It is engaging the ‘tall poppy syndrome’. It is a scandal.

It’s time for you to speak up and let the vilification stop.

Negative gearing is not a single sided conversation.


P.S The above is about you, but there is not enough room to discuss some of the ridiculous assumptions these politicians and shock jocks make about these matters, especially in regard to solving housing shortages, both rental and owner occupied, the impact on construction and development industries, and how to enable individuals to genuinely balance their long term investment strategies from the all too unpredictable stock markets, economies and happenings around the world.

Many of them don’t care; they just want you to listen to them, buy their papers and sell PR headlines or to be politically convenient.


What can Warren Buffett teach us about investing?

Warren Buffett is to the investment world what Coco Chanel is to fashion – absolute royalty. The American business magnate, investor and philanthropist has earned a reputation for himself as one of the most successful investors in the world, and as of March 2017, is the second wealthiest person in the United States with a total net worth of $78.7 billion*.

Most investors who have the ambition to be the next Warren Buffett usually make the most obvious mistake on their path to expected fortune…they fail to consult the learnings of Warren Buffett himself!

So how did he become the most highly regarded investor in modern times? Well, you may be surprised to learn that he did not make the bulk of his money by actually being a great investor himself. Yes, he obviously built a portion of his wealth in this way, however his great fortune was created by leveraging his own expertise. Initially, Buffett attracted a modest pool of investors and then once he had proven himself to be good at his business, the pool of investors grew larger.

His secret was and is simple . . .

“The investor of today does not profit from yesterday’s growth” – Warren Buffett.

Make the right investments

One of the trademarks of Buffett’s investment career that has stood the test of time is to buy undervalued assets. This is especially true when purchasing real estate where his philosophy is to buy real estate based on income generation and not appreciation, and he continues to follow these principles to this day.

When it comes to the share market, Buffett has avoided the flashing lights and ringing bells of investing in high risk start-ups and dodgy stock tips that a lot of us have fallen victim to over the years. Instead, he uses two very simple rules that guide him when making investment decisions:

1. The first rule is to not lose money
2. The second rule is to not forget the first rule!

Now you may think that these rules are a ‘no brainer’ but it is amazing how many investors fail to follow such simple advice. Buffet’s investment fundamentals are sound and based in common sense i.e. invest into companies that:

  • have a business that he understands with favourable long term economics
  • are defined as having a long term competitive advantage in a stable industry
  • have able and trustworthy management, and
  • can be purchased at a sensible price.

Don’t be afraid to track the index

Those of you that are small investors may be asking ‘”how on Earth do I adopt the principles of Warren Buffett when I obviously do not have his level of start-up capital?”

The best piece of advice that he can offer to smaller investors is to put your money into index tracking funds as they can provide you with broad diversification at a low cost and will eliminate the risk of stock picking experts that may not be invested in correlation to the performance of the market.

Educate yourself

How do we become smart with money? Luck can only get you so far and the old saying “the better I become, the luckier I get” is especially true when investing. Buffett’s father insisted that his son pursue a good education and once this was achieved, it has been the foundation for his success in investment markets today.

Be frugal

Buffett uses his money extremely wisely and believes that a lot of people today waste money. Instead of using his own money, he takes full advantage of leveraging into real estate and share markets by using other people’s money at affordable interest rates.

Be patient

The following Buffett quotes hammer in his philosophy when it comes to investment time frames for shareholdings:

“I never attempt to make money on the stock market. I buy on the assumption that they could close the market the next day and not reopen it for five years.”

“Only buy something that you’d be perfectly happy to hold if the market shut down for 10 years.”

“If you aren’t willing to own a stock for ten years, don’t even think about owning it for ten minutes”

“When we own portions of outstanding businesses with outstanding management, our favourite holding period is forever.”

“Time is the friend of the wonderful company, the enemy of the mediocre.”

Can you see the consistent theme in these statements? Investing is a long term strategy and, unless you’re one of those extremely lucky lotto winners, there is no ‘get rich quick’ scheme to lead you to great wealth.

Becoming Buffett

For all those budding Warren Buffetts heading out to make your fortune, just remember that it is essential to be well informed, patient, cautious but, above all, realistic with your expectations and you will be well on your way to financial success.

If you would like to discuss any of the points raised in this article, or would like to speak with someone about your own investment goals, please call our office on 1300 726 082 and ask to speak with a financial adviser.


*Source: Wikipedia

Image: The Huffington Post



General Advice Warning: This advice may not be suitable to you because it contains general advice that has not been tailored to your personal circumstances. Please seek personal financial advice prior to acting on this information.

The trials and tribulations of funding conception

For many, the decision to start a family and bring a baby into the world is a time of joy and excitement. However for an increasing number of Australians, it can also be a time of worry, financial burden and emotional turmoil.

Unfortunately, what should be the most natural thing in the world – conceiving a child – can be really hard. As many as one in six couples have trouble getting pregnant.

For women, once you hit 36 years of age your chance of conceiving naturally is halved compared to the chances you have at age 20. There is also a gamut of other female fertility issues to contend with besides the effects of age including issues with ovulation, uterine fibroids, endometriosis, to name a few.

And let’s not forget the gentlemen in this discussion; a little known fact is that male infertility is the single biggest factor influencing a couple’s chance of conception (with 40% of cases a sperm related cause).

As the reality sets in, many need medical support in their quest to become pregnant. In vitro fertilisation (IVF) is one such treatment that many couples struggling to conceive explore.

However, while IVF provides hope – it can also bring with it a financial burden that can take a toll.

How much does IVF cost?

IVF costs vary greatly depending on the treatment provider. Out of pocket expenses (the gap between actual cost and what is covered by Medicare) for an IVF cycle in Victoria can range from around $485 for Healthcare Card Holders (Medicare safety net met) to upwards of $4,501 (Medicare safety net not reached) for everyone else. And that’s before considering any additional screening/testing which a specialist may order.

On top of costs of the cycle, the treatment may also involve a day hospital procedure, of which Medicare may not cover the cost of – however it may be covered by your private health insurance (if applicable under your level of hospital cover).

Often, it takes more than one cycle for success – and then, success is not always a guarantee.

Funding treatment – what are my options?

For some, trying IVF comes after many attempts at other, less invasive, treatment options which have already taken a hit to the hip-pocket. For others, IVF is the only treatment option available to them. Whatever the case, there are a number of options that may be available to fund your treatment. These include;

  • Savings
  • Securing a loan
  • Early release of superannuation benefits

Saving to conceive

If you’re thinking about having a baby, it makes sense to start saving. Birthing and raising children can be an expensive exercise in itself, but as we have discovered earlier in this piece, it can also be expensive trying to conceive to begin with.

It might be overly simplistic, but dedicating a portion of your savings entirely to the goal of conceiving, is often the first step to funding fertility treatments such as IVF.

Do your research into the different IVF providers and the different costs you may encounter and calculate your savings goal. Work out how much you can afford to save and put this aside.

Securing a loan

While having enough money in savings to cover IVF is an ideal scenario, it isn’t always the case – especially if you have depleted savings on multiple failed cycles or exploring other treatment options.

In cases such as these, securing finance is an option you may want to consider. There are a few different loan options available including;

  • Unsecured personal loans
  • Medical loans

Depending on your eligibility for credit, you will usually have a range of different loan options available to you.

But be wary of interest rates and potential hidden fees and charges – you don’t want to pay more than you have to.

Aside from formal loan agreements, it may be worth talking to family and/or close friends who may be in a position to help out. This option certainly isn’t for everyone but if you are lucky enough to have this available to you, it could lessen your burden.

Accessing your super

If multiple failed attempts at trying to conceive has taken a toll on your mental health, you may be eligible to apply for an early release of superannuation benefits on compassionate grounds, to help pay for IVF treatment. The Department of Human Services (DHS) oversees such applications and will only approve applications by those unable to pay for the expenses by other means, such as savings, and all applications require supporting evidence.

However, while it may be possible to access funds in this way, taking from your super should only be considered as a last resort. IVF success rates in Australia range from around 40.1% per embryo transfer leading to a live birth for patients under 30 years, to 8.5% per embryo transfer leading to a live birth for patients over 40 years. There are no guarantees; so even if you are successful in acquiring funds from your super, there is a chance you still might not be successful in becoming pregnant.

It’s also important to consider that women, on average, retire with around $92,000 less than men – a super gap of 46.6%. The only way to recover these lost super funds is with time and work, or to make a contribution to your super fund out of your own pocket. Are you prepared to take away from your future self when there is no guarantee of present success?

The struggle to conceive can be a very emotional and trying experience – one that is only compounded by the stresses of financing the process. However you don’t have to suffer through this alone. At The Hopkins Group, our mortgage and finance team may be able to assist you in finding an IVF loan that is right for you. If you have any questions about financing IVF, why not speak to The Hopkins Group today?

General Advice Warning: This advice may not be suitable to you because it contains general advice that has not been tailored to your personal circumstances. Please seek personal financial advice prior to acting on this information.

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