{"id":112058,"date":"2023-04-13T15:03:27","date_gmt":"2023-04-13T15:03:27","guid":{"rendered":"https:\/\/websitedesigns.com.au\/elankanew\/?p=112058"},"modified":"2023-04-13T15:06:46","modified_gmt":"2023-04-13T15:06:46","slug":"noel-news-42","status":"publish","type":"post","link":"https:\/\/websitedesigns.com.au\/elankanew\/noel-news-42\/","title":{"rendered":"Noel News"},"content":{"rendered":"

Noel News<\/span><\/h2>\n

\"Noel<\/p>\n

Faith is a GPS that not only will reroute you when you lose your way, it will take you to a better destination!<\/em><\/span>
\nDAVID MELTZER<\/span><\/p>\n

Welcome to our April newsletter<\/span><\/h3>\n

It\u2019s amazing how quickly the year is flying by. The last four weeks have been dominated by proposed superannuation changes, where interest rates may be going, and the state of world markets.<\/span><\/p>\n

As I have said repeatedly, the way forward is to focus on the things you can control and not to get obsessed with things that are out of your control. Let\u2019s talk about interest rates first…<\/span><\/p>\n

Interest rates<\/span><\/h1>\n

Last Tuesday our Reserve Bank decided to put rates on hold, which was exactly what many of us thought would happen. However, they also made it clear that more rate rises could be expected. My view is that the cash rate will go to at least 4.25%, and it will be years before we see rates start to drop again.<\/span><\/p>\n

\"Interest<\/span><\/p>\n

The situation is rather different in America \u2013 late last month the Fed raised rates by another 25 basis points, which was a kind of concession. However, they pointed out that the labour market was still strong, that inflation was not under control and that they would keep raising rates until inflation got down to their target rate of 2%. Those same comments apply here in\u00a0Australia.<\/span><\/p>\n

Two property developers, Harry Triguboff and Tim Gurner, were front-page news last Thursday under the headline \u201cProperty about to boom \u2013 and it\u2019ll be on for young and old.\u201d These guys are serious players in the Australian property market. Triguboff, now aged 90, is celebrating 60 years in the property business, employs 900 people and builds 2000 apartments a year. Gurner is the new kid on the block, celebrating his 10th year in business with $10 billion-worth of apartments underway.<\/span><\/p>\n

Triguboff claims residential property will boom due to lack of supply, and pent-up demand from buyers and overseas migrants. He said, \u201cYou have a situation where there is no supply, immigrants are coming back, and the Chinese are returning. At some point in the next 6 to 18 months there is going to be an almighty boom.\u201d<\/span><\/p>\n

The rental situation was also the lead story for another major Australian daily. It claimed that over half the rental properties available are over 50 years old, 40% of them have cracks in the walls, 25% have plumbing issues and mould, and more than 10% have roof defects, electrical problems, or sinking foundations.<\/span>
\n\"Noel<\/span><\/p>\n

But almost any house is better than no house. In a nutshell, Australia has massive demand for all types of residential property now, and materials and manpower are as difficult to secure as ever. How on earth will inflation start dropping? Anecdotal evidence suggests that the savage rate rises to date have done nothing to curb inflation. Sure, some kids are now dropping out of school sports and school camps because of affordability, and the press is featuring coffee shop owners who are starting to do it tough as their customers look to spend less. But that\u2019s just a drop of water on the raging fire that is the big inflation picture.<\/span><\/p>\n

I appreciate there are different viewpoints about the direction of interest rates in Australia, but I go back to JK Galbraith, who famously said: \u201cThe only function of economic forecasting is to make astrology look respectable.\u201d<\/span><\/p>\n

You must do what\u2019s right for your own situation, but I believe that, however you look at it, it is reasonable to conclude that inflation is still rampant and interest rates will keep on rising. If you have a mortgage, your main focus now should be to get ahead in your repayments to create a safety buffer. The last thing anybody wants is to lose their home. And remember there may be a way out for people who are battling with their mortgage payments \u2013 they could always rent their house out, which means the interest will become tax-deductible, and find cheap accommodation elsewhere. This may be moving back in with the in-laws, but it\u2019s better than losing a house.<\/span><\/p>\n

Superannuation<\/span><\/h1>\n

\"Superannuation\"<\/span><\/p>\n

Photo by Diana Parkhouse on Unsplash<\/span><\/p>\n

An unrealised gain is an increase in value that has not yet been crystallised: the\u00a0 actual gain cannot be determined until the asset has been disposed of. Yet Labor intends to treat a gain that has not yet happened as if it had, using a simple formula. It is based on the difference between value of the fund on 1 July and the following 30 June, less adjustments for withdrawals and contributions. This notional gain will be taxed at up to 15% on any portion of the fund in excess of $3 million. This will create two lots of accounting, because the fund will still need to prepare the normal profit and loss account.<\/span><\/p>\n

I\u2019d be wary of the \u201cIt won\u2019t happen to me\u201d approach, because Labor claims<\/span>
\nonly 80,000 people have more than $3 million in superannuation. That may be true today, but these proposed changes are three years away, and a superannuation fund with a balance of $2.5 million now could well be nudging $3 million when the new rules start. And don\u2019t forget couples with $3 million between them \u2013 the survivor could be over the limit the moment one of them dies.<\/span><\/p>\n

Remember when all the argy-bargy which led to these changes was going on, there were many people calling for the maximum balance to be $2 million, not $3 million. If Labor is prepared to go out on a limb to tax unrealised capital gains, what is to stop a future government declaring that there are still far too many large superannuation accounts, and reduce the $3 million cap to $2 million?<\/span><\/p>\n

\"Noel<\/span><\/p>\n

But it goes much further. Once you start down the road of taxing unrealised capital gains, it becomes a slippery slope. Labor have already flagged capital gains tax and negative gearing as targets, and in Queensland the Labor government has been debating a rent freeze. The fact that a rent freeze is even being considered shows that the government has no idea of the mechanics of the rental market.<\/span><\/p>\n

Hypothetically, a future government could tighten up the CGT rules by reducing or abolishing the 50% discount. If that happened, landlords may well decide to retain properties, to avoid the CGT that would occur if they sold them. The government of the day could then announce, as they have in super, that there is a fortune locked up in all these unrealised capital gains because landlords won\u2019t sell and announce the extension of a new tax on the unrealised gain rule to apply to rental properties.<\/span><\/p>\n

Last month, Dr Ken Henry got the ball rolling by claiming the tax system is all wrong, with young people unable to afford a house while wealthy baby boomers enjoy large, concessionally taxed superannuation balances. There are other voices calling for death duties and for the family home to be assessed for age pension purposes. As the population ages and an increasing number of people become dependent on government, this will become a very busy area. Watch this space and keep your guard up.<\/span><\/p>\n

Banks behaving badly!<\/span><\/h1>\n

A long time ago, the four major Australian banks ran a joint marketing campaign titled \u201cCompetition brings out the best in people\u201d. It was designed to show the public that despite being few in numbers, the banks would never act like a cartel and would always put service above all. That was a long time ago \u2013 judging by the actions of banks today those aspirations are long forgotten.<\/span><\/p>\n

\"Banks<\/span><\/p>\n

The following stories are sadly typical.<\/span><\/p>\n

A friend of mine has been a customer of Ubank (owned by NAB) for over eight years. His Self-Managed Super Fund has a hefty sum on deposit with UBank, and last September a term deposit came up for renewal. Apparently, Ubank had recently split itself into two banks: the old Ubank and the new Ubank. My friend was told that he had become a customer of the new Ubank, but that no interest would be paid on his matured term deposit until he could re-identify himself by producing the original Trust Deed for his SMSF.<\/span><\/p>\n

He angrily pointed out that he had been a customer of the bank for nearly 10 years, and surely it was not beyond the resources of the new bank to get identification documents from the old bank. His protests fell on deaf ears. But it\u2019s what happened next that is beyond belief.<\/span><\/p>\n

New UBank told him he would have to take the original trust deed to a post office to be authenticated, after which he would have to send it to the bank\u2019s head office in Sydney. A Justice of the Peace or a notary public was not acceptable. Neither was a certified copy of the original trust deed. It had to be an original document and only Australia Post could certify it.<\/span><\/p>\n

My friend is a careful guy and knew where his original deeds were, so he duly queued up, got his trust deed authenticated and sent it express post, with tracking, to head office in Sydney. Three days later, tracking confirmed the bank had received it.<\/span><\/p>\n

After no communication from Ubank for six weeks, he made enquiries and was told that the bank had no evidence of receiving the package. He was instructed to go through the process again. This is not as easy as it sounds. First, original documents don\u2019t grow on trees. Second, because he had moved house in the intervening period, all his documents were locked away in various boxes. Right now, he hasn\u2019t got time to face the massive job of going through his boxes, but Ubank continue to refuse to pay him interest until he produces the deed.<\/span><\/p>\n

Another story:<\/span><\/p>\n

My son who lives in America recently asked me to bank a cheque for him into his Bankwest account in Brisbane. Bankwest has now been taken over by the Commonwealth Bank, which has naturally closed all the Bankwest branches. Logic suggested I take the cheque to the nearest CBA branch to deposit it into his Bankwest account. But no, the CBA no longer accepts Bankwest deposits \u2013 it has to be done at the post office!<\/span><\/p>\n

I don\u2019t know why the post office has become a de facto bank branch. When banks began to withdraw branches from the regions, people still needed to be able to make transactions, which is when the move to using the post office in the absence of a branch began, but when \u2013 and why \u2013 did they start to push transactions onto Australia Post even when there are related bank branches available? As each bank lowers its standards, the others scramble to follow suit. I reckon the post office is looking for ways to stay relevant, so perhaps it makes sense for everyone except the customers \u2013 and who cares about them, these days?<\/span><\/p>\n

Townsville seminar<\/span><\/h1>\n

The Townsville seminar went very well, and I\u2019ll be giving four more seminars after the budget is handed down on Tuesday, 9 May. These will be in Brisbane, the Gold Coast, Sunshine Coast and Ballina. Full details will be here in due course.<\/span><\/p>\n

\"\"<\/span><\/p>\n

The highlight of the night was meeting two young guys, Connor and Flynn , who had come along just to meet me. They had been given copies of my new book10 Steps to Financial Freedom<\/em>\u00a0and told me it had changed their lives. It\u2019s wonderful to get that kind of feedback. As we know, thanks to the miracle of compound interest, learning about money early in life, pays huge dividends down the track.<\/span><\/p>\n

Travelling north<\/span><\/h1>\n

When it was over, Geraldine and I drove to Port Douglas via Mission Beach. It\u2019s a lovely part of the world where I recommend Castaways Resort & Spa. It\u2019s right on the water with good food and good views. See photo below.<\/span>
\n\"Travelling<\/span><\/p>\n

The highlight of the drive from Mission Beach to Port Douglas was stopping at Shaylee Strawberry Farm just outside Atherton. It sells one of the best ice creams I\u2019ve ever had.<\/span><\/p>\n

\"Travelling<\/span><\/p>\n

We stayed at the Sheraton Port Douglas, which is right on the water, so there was no trouble going from our room to the beach for walks. We had a ground floor room with a ladder from the balcony straight into the pool. I\u2019d never seen that in any hotel before.<\/span><\/p>\n

A wonderful initiative at Port Douglas is the shuttle service. Many resort towns are short of transport, whether it be cabs or Ubers, but Port Douglas has shuttle buses which drive around the town continuously. Normally it only takes five minutes from when you make the phone call to when they pick you up, either at your hotel or at a restaurant.<\/span><\/p>\n

\"Noel<\/span><\/p>\n

Port Douglas is a fun place to visit, and we had wonderful meals at Nautilus, Melaleuca and Salsa. See picture of Nautilus below. Put it on your bucket list. That\u2019s where Bill and Hillary Clinton dined on their last visit to Port Douglas.<\/span><\/p>\n

\"Nautilus,<\/span><\/p>\n

A special podcast for you<\/span><\/h1>\n

Only when you\u2019re sick do you realise that health is the greatest asset you can have. It\u2019s absolutely necessary if you want to enjoy family, stay positive, and make the most of the short time we have.<\/span><\/p>\n

More and more, I\u2019m reminded that the foundation of health and well-being is, in fact, brain health. It drives everything we do so, of course it should be the #1 thing that we take care of.<\/span><\/p>\n

Yet, if you look around, the world is filled with people who never think about how they\u2019re damaging their brain. (Which, in my financial career, has been a great source of frustration. l never understood why people would rather be ignorant about their financial path rather than take any meaningful action to correct it.)<\/span><\/p>\n

Last week, my son James interviewed 12x New York Times bestselling author and brain health expert, Dr. Daniel Amen. It was\u00a0a fascinating conversation<\/a>\u00a0about all aspects of brain health.<\/span><\/p>\n

\"Noel<\/span><\/p>\n

Some of the topics covered include:<\/span><\/p>\n