Short selling stocks - Risky business?

To put it simply, short sellers make money when the share price goes down.  It goes a bit like this.  Let’s say you own 1000 BHP shares and the current share price is $40 (total value = $40,000).

Because I am a risk taker, I will take on the role of short seller.   I contact my broker who gives me, I mean borrow for a fee, your shares and then I immediately sell them on the stock exchange.    I have pocketed $40,000. Read more

Advice from Bill Gates - This week’s money tip without the BS

Bill Gates dished up the following rules of life at a high school speech about 11 things they did not and will not learn in school.

He spoke about how feel-good, politically correct teachings created a generation of kids with no concept of reality and how this concept set them up for failure in the real world.

They are all gems.  If you have teenage children email it to them, or you could print this page and stick it on the fridge Read more

Telstra’s sneaky trick costs you money

Q. A few weeks ago you gave a number to ring Telstra to extend the rings on your mobile phone before it goes to message bank. Mine goes to message bank so many times. I was driving at the time and didn’t get the number. I hear your show most Sundays while I’m traveling to my children’s sporting events. I love the show.

Josie’s answer: Thanks for listening to Money Matters and happy (and humbled) to hear you love the show.  This was one of my Money Saving Tips without the BS (boring stuff) that I do at the end of the show.

I was doing one of my usual rants and raves and implied that the phone companies are very sneaky as they set the number of rings on our phone to about 3 or 4 and then it goes to message bank.

As a result, we have to pay to retrieve the message and then ring back.  Furthermore, the person who has rung you has also paid for the call.   Basically a blatant rip off.    Most of the phone companies are doing this to boost their profits. Read more

Hate to Budget - Pay Yourself First!

 

Hate to budget? An oldie but a goodie - pay yourself first.

Set up a bank account and direct at least 10% of your salary and forget about it.   Works particularly well if your employer has the facilities to  direct debit straight from your salary to your bank account. Read more

Is my term deposit safe? I am very concerned the banks will collapse.

Q,. Josie, we have the proceeds of our recent house sale in a term deposit with a major Australian bank. How concerned should we be in regards to it’s safety in light of the current financial problems worldwide?

The amount concerned is in the vicinity of $250,000, and without this, to buy another house, we would be struggling.

Thanks for your time. Read more

Property versus Shares - check out this great excel tool!

Is your house a palace?  During my money saving tips (without the BS) segment, I talked about how frustrated I get when people brag about how much they have made from buying and selling their home.

This is a typical conversation “I bought the house for $150K and sold for $300K, therefore, my profit was $150K”.   What a silly way to analyse the way an investment is performing.   Talk about sticking your head in the sand.

What about interest, maintenance, buying and selling costs?   I could come up with a big long list of expenses associated with property, but you are all clever enough to know what they are.  Don’t get me started on stamp duty.   Also, be careful when reading quoted returns published in newspapers.

For example, the latest figures might say that properties in your suburb have increased by 12% in the past year.   Sure it makes you feel good, but you fallen into the trap.   This is the average increase.  Your particular home might not represent the average.

How many sales occurred in your area?  If the number was small then the figures are not really a true indication of the price change.   The biggest mistake people make is to forget that lots of home owners and investors have renovated their properties.

A new kitchen and bathroom can easily cost $30K+.   Has the price in your area increased because of land values, or a greater desirability of people to live in these lovely newly refurbished houses.    Quoted figures do not take this into consideration.   Just food for thought.

Anyway, I also mentioned a great little tool that MLC have put together.   It’s an excel based tool that compares the established house price index for all the leading capital cities of Australia against a range of market indices, such as the All Ordinaries Accumulation Index (top 500 Aussie shares with income reinvested).

The data for the house prices were supplied by the Australian Bureau of Statistics (I therefore trust it).  A word of warning though.   The tool only supplies info to December 2007.  As you know the sharemarket has fallen a bit since that time, approximately 25%.  Surprisingly, the figures still look quite good for share investors.   Would love to know what you think.    Cheers and thanks for visiting the site.  Josie Kay

property versus shares - which is better? MLC Dec 07

ps.  this is a free service.  I rely heavily on word of mouth, so would be really chuffed if you told your family and mates about this website - free money saving techniques, advice & tips from a certified financial planner - no strings attached.

Josie’s Quick Money Saving Links:

Receive all the latest travel news with Travelworld Holiday Club . You’ll be the first to know all about a host of domestic and international flights, hotels, car rentals and travel information as well as the chance to win fantastic prizes.

AND OF COURSE YOU MUST READ THIS: Don’t forget that the above information is general in nature and not specific to your goals and objectives. It is recommended that you seek personal financial advice specific to your needs.

Superannuation Warning - “Is your employer paying your superannuation”

Q. On your radio program you mentioned for workers to check that their co-contributions are being paid as per the ATO rules.

Could you please give a little more info?

Read more

Finance Calculators - as featured on Money Matters

Hello readers - Kel Harper here doing some work for Josie….On Sunday’s Money Matters show Josie mentioned some finance calculators…well, I haven’t had time to make any cool little images for you to click on but I do have the links….all you have to do is click and have fun:

Millionaire calculator:

http://www.askjosiekay.com/java/Millionaire.html

Compound Interest:

http://www.askjosiekay.com/java/CompoundInterest.html

Mortgage Pay off:

http://www.askjosiekay.com/java/MortgagePayoff.html

Mortgage v Rent:

http://www.askjosiekay.com/java/MortgageRentvsBuy.html