Save big $$$ on hire car excess insurance - Money Tip without the Boring Stuff

A big thank you to Mick for this one.

Mick travels a lot and has shared this fantastic tip to save money on Damage Waiver Excess Insurance that car hire companies entice you to pay.    You know the drill.  You front up to pick up the keys and sort out the paperwork and then they ask if you would like to purchase insurance to waive the excess which is usually a daily charge.  You smell a rat, but you are in a bind as you don’t want to risk it.  If you had an accident or your car was stolen you might be liable to pay  thousands of dollars.  It would certainly put a dampener on the holiday.

However, did you know that travel insurance provided by various companies already covers this excess (in the fine print)?   Even if you travel domestically you can purchase travel insurance for medical, unexpected cancellation, lost luggage etc. Read more

First Home Owner’s Grant - Grab it or leave it be? Money Tip without the BS

The Government’s announcement that they would temporarily double the First Home Owner’s Grant from $7,000 to $14,000 if you purchase an existing home and triple it to $21,000 if you purchase a brand new home was welcomed by the housing industry.   They certainly need a boost at the moment.

I remember the days when I was itching to buy a home and it felt great when I was able to purchase a little three bedroom home in the burbs on my own.   This was back in the early 1990s.   I sold this house in only a few years ago and it did increase in value.  However, after I calculated interest costs and ongoing maintenance I made very little from it.    At least it forced me to save. Read more

Is my financial planner overcharging me?

Q I have a financial planner who charged $7700 for an initial investment of around $30000. This gave me a credit until $100000. Every time I do additional investing (capital +or margin loan) they charge 5.5% of that extra investment amount (after $50000 it becoms 3.5%). Also the index fund, MLC-Vanguard Aus share index charges its 0.54% with a 0.3% rebate + the margin loan interest of approx 10%. My question is, this seems extreme to me. is it? The value of the portfolio would have to increase by at least 4% + 4% dividends for this investment to even break even. Am I right?

Josie’s answer: ‘Watch out.  Everyone is after your money.   Learn how to outsmart them! (also applies to financial planners).

Thanks for your question and I am gobsmacked.     Read more

Margin Lending - the good, bad and the ugly.

Margin loans are simply an investment loan that is secured against the assets you are purchasing, such as shares and managed funds.   You don’t need to sign over your house and that is why so many people like them.    However, investors can get into trouble if their investment falls below a certain level, known as the loan to valuation ratio (LVR).

You may have heard of margin calls.   When these happen, investors are in a bind.  They can either sell down their investment to restore the LVR,  in other words forced to crystalize losses, or have to find the funds to top it up.  What a tough decision to make in this current economic climate.  You could be buying bargains, or perhaps throwing good money after bad.    Some institutions also allow you to assign other assets.  Read more