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BarryBevan

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4 hours ago, XCOM.! said:

Sure, and you clearly have the ability to make sound choices. But trust me, I have dealt with people who had no idea what any of it meant, what they'd gotten themselves into, of even what they owed... and they continued to be given more and more credit even as they were defaulting on debts. In some cases, the inability to understand simple arithmetic should have been a red-flag, but wasn't.

But even for those who do have the ability to understand and plan, there are too many situations that are difficult to predict the impact of, even for the most careful.

I've seen parents who simply fell apart watching their child die of cancer, and lose everything (including the will to live) as a result.

I can't imagine many would be considering 'what will happen if my child dies' as something they need to provision for in their financial plan.
 

I was around when interest rates were 17%. :(  And have always been worried rates would eventually go back up.... but fortunately for us all they have been pretty good for the last 10 years.

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2 hours ago, ComfortablyNumb said:

But I think your No.1 is a bigger problem for a lot of people....and the desire to keep up with the Jones's.  Cars are a biggie I notice, e.g. the hairdresser earning three fifths of FA who buys a new Audi when a Camry would be fine. 

Cars are the fastest depreciating asset known to man. That's why I hope the Jones's keep down with me rather than me trying to keep up with the Jones's. Beside...I don't even like the Jones's. There pompous pricks...lol

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1 hour ago, IronmanFoz said:

I was around when interest rates were 17%. :(  And have always been worried rates would eventually go back up.... but fortunately for us all they have been pretty good for the last 10 years.

I bought my first house with my fiance, then re-bought it off her when we broke up. A year later I was paying 17% interest on it. I made the tough decision to hang on. It was bloody hard to get through it, but I'm glad I did.

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1 hour ago, IronmanFoz said:

I was around when interest rates were 17%. :(  And have always been worried rates would eventually go back up.... but fortunately for us all they have been pretty good for the last 10 years.

Us too, but we were childless & saved all my wife's wage, which happily sat in the Civic Bank earning heaps of interest for 4yrs while we lived in Europe & spent all our disposable on holidays.

Had a decent house deposit when we returned in '92 with our first daughter on the way and interest rates were back down to 8%.  Decided to buy our first house (a dump, which we fixed up a little, but made no money on), Civic Bank wouldn't give us a mortgage despite having a 25% deposit because my wife looked 'so pregnant'.  Westpac would lend to us, hence we have been with them ever since. 

Always overpaid our mortgages to get rid of them fast.  Always bought 2nd hand cars (25yo Hilux still going & is my fishing guiding rig....though I'm getting weary of it). Always had a buffer growing in the bank for emergencies, and lately (now the girls are self-sufficient) started really upping the Super (salary sacrifice) & investment in shares/share funds.

No get rich quick schemes.  No letting the banks screw us.

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Common sense not very common.

Credit cards are another trap. How is it possible to get yourself 15K in the hole and paying the minimum repayment for years (often less than the monthly interest charge) and banks/Amex etc will keep offering you a credit limit increase several times a year? 

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3 minutes ago, Parkside said:

Common sense not very common.

Credit cards are another trap. How is it possible to get yourself 15K in the hole and paying the minimum repayment for years (often less than the monthly interest charge) and banks/Amex etc will keep offering you a credit limit increase several times a year? 

The auto increase limit has been stopped from memory but it was a fort. I declined so many increases it wasn’t funny.

Also have only paid a credit card late once......my wife went bananas cause we had to pay interest. 

We do however use the credit card for “everything” and then pay in full every month. It’s good for the QFF points. Makes skiing holidays overseas a lot cheaper. Our last one to Whistler just a few weeks back - save $8000 due to the FF points.

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Been there, done that Parky.  When we built our house, it was my wife's income that got it all for us.  Serviced the building loan, land, existing house and my shop rent.  The bank suggested we just dump the extras into the cc then re roll it into the loan or something.  Then wifey got sick, lost her job and we were stuffed.  Shit happens.  Spent years with a cc pretty much maxed out, sometimes shopping every day to keep the spend small as it was over it's limit and we had no cash.  You just do what you have to.  

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Few mentions of shit happens which is true.  Thing that gets me is why so many insurance companies will limit salary protection to 2 or 3 years max, with the compulsory 2 or 3 month waiting period which in itself is a killer for most people with no leave balances to draw on.  Shop around and you will find a few providers that give income protection to the age of 67.  I used to have to deal with company provided and super fund provided claims, am yet to see one that is for someone with a diagnosis to ever be able to work again.  Had one claim that did not live the 2 years out, but all the others on the 2 year schemes get into a big hole once the 2 years is up.

And for those wondering of cost, on my own insurance taken out at age 35, getting the coverage to age 67 was 10% over the 3 years protection with the same company.

Of bigger interest, is why no bank or lender has once asked me whether I have this coverage when assessing the risk...

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8 hours ago, IronmanFoz said:

The auto increase limit has been stopped from memory but it was a fort. I declined so many increases it wasn’t funny.

Also have only paid a credit card late once......my wife went bananas cause we had to pay interest. 

We do however use the credit card for “everything” and then pay in full every month. It’s good for the QFF points. Makes skiing holidays overseas a lot cheaper. Our last one to Whistler just a few weeks back - save $8000 due to the FF points.

Lol, same happened to me.

We do exactly the same with our Westpac CC & also have AMEX which earns more QFF points.  My wife is the Queen of getting QFF points.  We use them a lot to fly the girls home or to join us somewhere on hols (e.g. the Byron Bay Tri in May).

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8 hours ago, Cottoneyes said:

Few mentions of shit happens which is true.  Thing that gets me is why so many insurance companies will limit salary protection to 2 or 3 years max, with the compulsory 2 or 3 month waiting period which in itself is a killer for most people with no leave balances to draw on.  Shop around and you will find a few providers that give income protection to the age of 67.  I used to have to deal with company provided and super fund provided claims, am yet to see one that is for someone with a diagnosis to ever be able to work again.  Had one claim that did not live the 2 years out, but all the others on the 2 year schemes get into a big hole once the 2 years is up.

And for those wondering of cost, on my own insurance taken out at age 35, getting the coverage to age 67 was 10% over the 3 years protection with the same company.

Of bigger interest, is why no bank or lender has once asked me whether I have this coverage when assessing the risk...

I treated an accountant who retired and lives on income protection insurance after having a stroke and losing vision in one eye. He had an agreed value policy, not the usual 75% of income. That plus crisis cover and you should be pretty safe in the worst case scenario 

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How much would that cost a month for coverage until pension age?.  I just did an online one and for $3k a month for 2 years was nearly $160/month.

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Goughy I'm covered for $4.5K/mth and it costs me about $3K/year through OnePath. Of course the cost goes up every year.

I found out recently I could have got similar cover through UniSuper for just $300/yr!, but they declined me because of my knees - not that my knees have ever put me out of work for even a day.  I argued that, but they still declined.

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11 hours ago, Parkside said:

Common sense not very common.

Credit cards are another trap. How is it possible to get yourself 15K in the hole and paying the minimum repayment for years (often less than the monthly interest charge) and banks/Amex etc will keep offering you a credit limit increase several times a year? 

Case in point. Married couple with 4 kids, mortgage, etc. Husband loses job, turns to the bottle and starts beating the crap out of his wife and then then took the kids interstate. Woman uses P/Loans to fund an expensive ugly battle to regain custody, and then C/Cards to provide food, shelter, etc for her and the kids. She gets 2 jobs but can't generate enough income fast enough to meet both repayments and expenses, and is scared to death that she will be challenged for custody if she declares bankruptcy or can't provide, so gets deeper and deeper into C/Card debt. By the time it all came to a head, she'd achieved enough income to provide for the family, but by then there were 5 P/Loans and 12 C/Cards, with the latest just being used to juggle the minimum and penalty payments on the maxed out others, and with the banks and debt-collectors all circling for blood.

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1 hour ago, ComfortablyNumb said:

Goughy I'm covered for $4.5K/mth and it costs me about $3K/year through OnePath. Of course the cost goes up every year.

I found out recently I could have got similar cover through UniSuper for just $300/yr!, but they declined me because of my knees - not that my knees have ever put me out of work for even a day.  I argued that, but they still declined.

Yeah, add your knees and two recent strokes to the list.  Wonder how that would hurt.  Myself, the scenario would go, some insurance from my meagre Super, then sell house and can probably buy a little flat or duplex outright and then disability pension for two of us.  

My dad was always a big believer in insurance, which came to naught for him in the end.  Quite simply can not afford it.  But there are plenty of people who can't, nothing unusual about that.

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20 minutes ago, goughy said:

Yeah, add your knees and two recent strokes to the list.  Wonder how that would hurt.  Myself, the scenario would go, some insurance from my meagre Super, then sell house and can probably buy a little flat or duplex outright and then disability pension for two of us.  

My dad was always a big believer in insurance, which came to naught for him in the end.  Quite simply can not afford it.  But there are plenty of people who can't, nothing unusual about that.

Yeah, most of our insurance has been like burning 50's out in the back yard, and that includes private health insurance.  I've had all my surgeries done free in the public system, except one in the private which cost me $800!

I think you can still have a good retirement in a small place on the pension if you stay fit & have some hobbies.  I'd be quite happy to retire into a small unit in Port Mac, Coffs or SW Rocks, keep up my swimming/gyming/MTBing into my 80s and longer, keep on fishing & guiding, fly-tying and building models. Just run an old 4WD and a half-decent sedan. But have a feeling the Mrs will want a house...which may break the bank 😣

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4 minutes ago, ComfortablyNumb said:

Yeah, most of our insurance has been like burning 50's out in the back yard, and that includes private health insurance.  I've had all my surgeries done free in the public system, except one in the private which cost me $800!

I think you can still have a good retirement in a small place on the pension if you stay fit & have some hobbies.  I'd be quite happy to retire into a small unit in Port Mac, Coffs or SW Rocks, keep up my swimming/gyming/MTBing into my 80s and longer, keep on fishing & guiding, fly-tying and building models. Just run an old 4WD and a half-decent sedan. But have a feeling the Mrs will want a house...which may break the bank 😣

Don't get me started on private health insurance!! Biggest con job ever. Anytime something serious happens you go to a public hospital anyway, and then when you have elective they absolutely smash you with fees. I have private health, broke my foot and needed it pinned, went private and was $6K out of pocket!! The only saving grace I guess is the doctors seem to be a higher quality and I've never had a problem with my foot since..

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Funny enough, of all the things we have its private health!  Yes, most things would have been done publicly.  We had to get it initially as the only IVF clinic here would not work with the public hospital.  So it got used a bit through all the pregnancies, losses etc.  My wife feels more comfortable in private hospitals after an unhappy experience publicly, and since she's had so many visits and surgeries I live with this.  There's also been a few things we've had done by top surgeons in town, referred from guys I ride with,  who have forgone their gap fees for us, but that wouldn't have happened without the private health.  Plus my teeth, which wouldn't have been done the same way publicly, that would have been nearly two years of private health payments itself.  We have been considering dropping it with the way things are now, but one of the doc mates I ride with is insisting we keep it since the strokes.  I haven't seen him to ask him why, he just told me not to cancel it yet.

I went to the public for my strokes (my wife doesn't know why) and they looked after me fine.  Sure I didn't have a private room but noise cancelling headphones help.  But I also was able to give the hospital the permission to charge my health fund for my stay (second time I've done that) so that kinda makes me a little bit happy.

Face it, we really do have it pretty good here.

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14 hours ago, IronmanFoz said:

Also have only paid a credit card late once......my wife went bananas cause we had to pay interest. 

If you've been with the same bank for a while and usually pay on time, just ring them up if you miss a payment and they should reverse the interest charges.  I've been with CBA for years and I've forgotten to pay a couple of times, but never had to pay interest.

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21 hours ago, IronmanFoz said:

Cars are the fastest depreciating asset known to man.

Not all cars. Just increased the agreed value $20K one year after buying one of mine... :ninja:

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11 hours ago, goughy said:

How much would that cost a month for coverage until pension age?.  I just did an online one and for $3k a month for 2 years was nearly $160/month.

I'm covered for around $8K per month for $140 per month, through to age 67 (and with a CPI increase on the coverage amount every year, whether claiming or not).  More than enough to cover everything other than possible out of pocket medical expenses in a worse case scenario.  We previously also took out a policy to cover my wife while not working.  Think we paid around $80 per month for $3.5K coverage - If something happened to my wife and I had to give up work even to look after the kids, we would have not coverage otherwise.  Kids are older now so would not need to give up work to mind them so we cancelled that one.

Being an office based worker that had good results on the medical tests to get it probably had me marked as a low risk though (had BMI of 21 when it was completed and resting heart rate of 48).  Had a previous policy with Virgin money and had to get a medical done, one of their nurses came to my house to do it.  Had an early morning appointment and needed to get to work quickly after so had my riding gear ready to get changed into.  Medical test was fine, but got the policy with a clause inserted about not covering me for any motorbike activities where the speed was in excess of 130km/hr.  

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There was an article yesterday on news.com on how there were too many people juggling up to 12 credit cards...... shit that’s a lot. You would have to have a good system in place.

like I said before ...I use them for QFF so I swap and change heaps. Just got to manage it well and never have more than 3 on the hop. 

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1 hour ago, IronmanFoz said:

There was an article yesterday on news.com on how there were too many people juggling up to 12 credit cards...... shit that’s a lot. You would have to have a good system in place.

If you have the smarts to juggle that many, you shouldn't have to.

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On 08/02/2019 at 5:53 PM, Cottoneyes said:

 Everyone of my bank shares went up 10% since the report was handed down, so the people with the money know the outcome.

😋

You do realise this happens around this time of the year, every year.  Its because big investors are buying the shares in preparation for reporting period and the sizable dividends that will be (hopefully) forthcoming.  Prices will drop again in early-mid April.

AJ

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1 minute ago, -- AJ -- said:

You do realise this happens around this time of the year, every year.  Its because big investors are buying the shares in preparation for reporting period and the sizable dividends that will be (hopefully) forthcoming.  Prices will drop again in early-mid April.

AJ

No.

They all went up around 4 to 10% the day of the announcement after being flattish before & after. This is the Westpac graph showing an 8% gain on the 5th, after the report was handed down on the 4th. It doesn't go ex-dividend for another 3 months, so that isn't affecting it's price at all. All the big 4 performed like this.

image.png.c309fcac564fa8fa88e780b9c17ec71c.png

Even the beleaguered AMP which has shown an incredible collapse in the past year and today announced a 97% drop in profits, gained 10% after the findings were released.

 

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So....we have our first class action against a bank.

https://www.news.com.au/finance/business/banking/it-is-worse-than-being-back-to-square-one-westpac-hit-with-class-action-over-irresponsible-lending/news-story/6b3d4058db96c442c05ae0e2112f32c6

IMHO these two people were gamblers. They were betting and riding the property boom whilst only paying the interest only. They did not have the money but kept buying on the pare gains on each subsequent property. So for at least 5 years they would have been telling all how easy it was no doubt etc until the property market crash and interest rates get tightened. When the interest only period on there loans finish, what did they expect to happen.

Going to be an interesting case.

Reading the comments section appending to the articles there is no real sympathy for this couple from the general public. In fact they are scathing.

 

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