Help! I have lost my super.

Q. Hello I have lost super and I have been told that I could use this to buy a house for our retirement.  I am 55 and my wife is 51 we are renting and would like to have a house that is ours what can we do. thank you.

Josie answer: A common problem with billions of dollars lost.  However, it is not really ‘lost’, just too many people not caring enough about their superannuation.

Super funds contact you on a regular basis, but if you have changed address it is very easy to forget.  You have worked very hard for your money and great to see you have finally mustered up some energy to find all those lost superannuation accounts. Read more

Does an employer have to pay Super to someone who is working 24 hours per week?

Q. Does an employer have to pay the superannuation guarantee charge to someone who is working 24 hours per week?

Josie’s answer: Yes, they do, however, they are exempt from paying super for the following:-· employees paid less than $450 in a calendar month· those aged aged 70 years or more· employees less than 18 years of age and working less than 30 hours per week· non resident employees· employees who are paid for domestic or private work, less than 30 hours per week. Read more

What is the Rule of 72?

Q. Someone mentioned the Rule of 72. What does it mean?

Josie’s answer - I love the rule of 72 which is a very handy to remember.

It is known as the rule of 72 because it can give you a quick answer as to how quickly your investment can grow by re-investing your investment’s earnings. It tells you how many years (give or take a month) it will take to double your money at a given rate of return.

You need to start with the number ‘72’. You then determine what rate of return you expect to get on your investment. By dividing this return into 72 you will know for how many years you need to invest to double your money. Read more

Investing Internationally - Is it Risky?

Q. My adviser has recommended that I invest some of my money overseas. It sounds a bit risky?

Josie’s Answer - The main reason why you would allocate some of your funds, overseas is for diversification.

For your info, the Australian sharemarket represents around 2.3% of the world’s total sharemarkets, which means that nearly 98% of the world’s shares are not available to you.

A bit of trivia, you will be surprised to know that Australia’s sharemarket is actually smaller than the markets of Switzerland (3.1%)The size of our market is not too dissimilar to some of the world biggest companies. Read more

Please tell me when the share market started to decline

Q. I listen to the show every week. Could you please tell me with reasonable accuracy when the share market started to decline. Thanks Robyn

Josie’s answer: Hi Robyn. Thanks for your question and I am crossing my fingers that your investments have not suffered too much with the recent volatility.

I am assuming you are referring to the All Ordinaries Index, which represents the top 500 stocks listed on the Australian Share Market.

This index appears to have peaked on 1st November 2007 at 6853. As at today’s date (2nd April 2008), the index closed at 5544, which means it has dropped approximately 19% since that date (as you would know it has been lower!).

To get back to its peak, the market now needs to increase by nearly 24%. Who knows when it will reach its peak again, but historically speaking it is not unusual to see it exceed its previous high within 5 months. Read more

What happens If I die without a will?

Q. Hi Josie. I turned on the news after work today and it was one tragedy after another….which got me thinking, if I die today, what will happen if I don’t have a will in place?

Josie’s Answer – You’re right about the news….which is why I don’t really mind if I miss it ever now and then.

To your question, It is recommended that everyone has a will, even if you think you have no money.

You might have some in your super fund that you have forgotten about. If a person dies without leaving a will they are said to die intestate and how it is divided up depends on where you live. Read more

Margin loans - A Friend Of Mine Says They’re The Way To Go, Why?

Q. A friend of mine has a margin loan. Why would he have one?

Josie’s answer - There has been lots of bad press lately about margin loans (you may recall Eddie Groves from ABC Learning is now in deep financial trouble because of them).

Margin lending is a higher-risk strategy. Your investment, for example, the shares you bought, is the security for the margin loan and its value varies on a daily basis.

If the share market takes a nosedive you might suddenly no longer have enough security for your loan. Read more

I have a Question about “Wills and Separation”

Q. I am separated and wondering if my will is automatically revoked?

Josie’s Answer - No. However, the rules vary between each State.

We recommend you seek specialist legal advice. Wills should be reviewed every 3-5 years or whenever a major life event occurs e.g. separation, birth of a child. Read more

I need help Consolidating my Super?

Q. I have a few superannuation funds which I am trying to consolidate and finding the whole process very frustrating. Any suggestions?

Josie’s Answer - Congratulations on trying to organise your financial life.

As you know having a few super funds probably means that you are paying extra fees, which will only hurt you financially in the future. There may also be a financial planner or two also receiving some commission and probably not giving you any service.

The problem these days is that you need to provide documents which are certified by an acceptable person. Acceptable documents include your driver’s license, passport, birth certificate (plus many others). Read more

We’re Having Trouble Saving for a home - Any Suggestions?

Q. My wife & I are finding it very difficult to save for a deposit on a new home. Any suggestions?

Josie’s Answer - This is a very daunting task considering that most new borrowers need to save approximately 10% of the home value in order to get into their first home.

You should you think about opening a high interest savings account (see Rate City) and have a portion for your salary (at least 10-20%) automatically transferred into this account each month. Read more

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