The $5K pay rise you’re missing out on

Want $5000? Don’t expect it from a pay rise, there’s an easier way to get your hands on s

Want $5000? Don’t expect it from a pay rise, there’s an easier way to get your hands on some extra funds.
Source: Getty Images

David Koch offers some tips on how to budget successfully.

MISSED out on that pay rise this year? Still sore about it?

Well there’s a better way of snaring those much-needed funds and it’s easier than you think.

As it turns out, you’re probably among the 86 per cent of Australians who are leaving hundreds, if not thousands, of dollars on the table every year when it comes to personal and household expenses.

Or perhaps you’re among more than half who “set and forget” your utility providers which could be costing you up to $5000, or the equivalent of a pay rise or overseas holiday, a survey has revealed.

According to research conducted by Lonergan Research on behalf of low cost mobile service provider amaysim, three in five of us, or 62 per cent, consider ourselves to be rational decision makers.

But despite a vast majority believing they could be saving more, 15 per cent are unwilling to put the effort in to do so.

And 40 per cent admit they deliberately put off changing providers on anything from mobile phones to home loans, despite knowing a change would save them hundreds.

According to Ark Total Wealth senior financial adviser Chris Magnus, this was not surprising.

He said many Aussies chose to stay in a “budget rut” instead of undertaking a financial tune-up and this “money-saving paralysis” could add up to $5000 every year.

For example, an amaysim customer survey conducted earlier this year found savvy phone users could save up to $448 a year simply by switching providers.

He said other factors such as failing to transfer to transfer a credit card balance could also cost the average holder up to $1500 a year.

Forget loyalty, switching your balance transfer on your credit card can save you hundreds

Forget loyalty, switching your balance transfer on your credit card can save you hundreds.
Source: News Limited

Switching electricity providers, as well as restructuring your mortgage, could also add up to thousands.

Mr Magnus said a simple switch on a $500,000 mortgage you could save up to $3500 a year.

And he warned it was just the tip of the iceberg, as people thought it was easier to stay with their existing service provider than switch.

“People do get complacent or think it’s too hard,” he told

“But one of the first things I tell every client is that, if you take care of the pennies, the pounds will look after themselves.”

Mr Magnus admitted most people didn’t like saving for the sake of saving, yet could be pocketing $5000 without even trying just through making simple changes.

Michelle Hutchinson, money expert at financial comparison site, said she wasn’t surprised consumers were missing out on money every year.

She added that savings were crucial, even if people had nothing to save for.

“Saving the equivalent of three month’s pay is recommended as a good safety net in case you lose your job,” she said.

“Saving towards a goal such as buying a home or a holiday is motivating and can have positive psychological benefits.”

She said it made sense for some people to have no savings if they didn’t have any goals to save for, but that saving also went hand in hand with financial literacy and discipline.

“You need to make an effort with keeping track of your spending, setting and reviewing a budget, and comparing your financial products,” Ms Hutchison said.

“Without understanding how your financial products work and how much they really cost, and by being complacent about your money, you will never be able to save.”

You might not be able to have this every night but could afford a glass more often throug

You might not be able to have this every night but could afford a glass more often through simple money saving tips.
Source: Supplied

Still stuck on a budget rut, or unable to save?

Here are Mr Magnus’s money saving tips.

1. Separate your savings on payday:

“The best way to save is to limit what you have available in your access account to spend,” he said.

2. Prioritise paying off credit cards

He said a simple refinance to a 0 per cent interest could save hundreds while people should pay off credit cards before starting a saving plan.

3. Shop smart:

“Plan your meals for the week and look at the price per 100g on specials when shopping to make sure you’re getting the best deal,” Mr Magnus said.

4. Set a budget and stick to it:

Being organised is the key to financial freedom.

5. Start small:

Review your personal and household bills and find simple savings. It could add up to big bucks.

6. Choose wisely:

For instance, find the mobile phone plan that’s right for your needs, rather than paying for what you’re not using. It could save you hundreds in the long run.

7. Sense-check your mortgage:

Don’t be afraid to refinance, and always go for the best deal.

8. Spend super, not savings:

Paying insurance with pre-tax dollars from your super could save you big dollars as it is taxed at a lower rate.

The financial nightmare of (mistakenly) being branded a terrorist

mistakenly branded terrorist
Not everyone on the government’s terrorist watch list belongs there, a new report finds.


Americans who are branded terrorists by the U.S. government are facing financial peril — losing their jobs, their homes and all access to cash and credit.

The government keeps a list of those it deems a threat: The Specially Designated Nationals and Blocked Persons list, maintained by the Treasury Department.

Once someone lands on this list — and even before they are put on the list, while they are under investigation — their assets are frozen and they are blocked from making any financial transactions.

That makes sense if that person is actually a terrorist. But not everyone on the list belongs there, according to a new report from the Lawyers’ Committee for Civil Rights (LCCR).

Related: Big data knows you’re sick, tired and depressed

Mistakes happen most often to people who have the same or very similar names as an actual terrorist, the San Francisco-based group found, and it obtained more than 100 records from people asking the Treasury to remove them from its list of terrorists.

The Treasury Department didn’t say whether anyone has been erroneously investigated or added to its list, and said it has never lost a court case where a specific designation was challenged.

But in its report, the LCCR highlights multiple lawsuits that have ended in settlements in which names were removed from the list.

The group also pointed to two court cases where the terrorist designation process itself was found to be unfair — with a district court in one case ruling that the Treasury Department’s seizure of assets without warning or reason was a violation of the Fourth Amendment.

And the records the group obtained from the Treasury Department show just how stressful being on this list can be.

One person requesting removal said being flagged as a terrorist caused “hefty damages and harm not only to my family, but emotionally, morally and also economically since this situation led to the closing of my company and to fire personnel.”

Why the TSA wants cellphones turned ‘on’

People aren’t even notified that they’re a suspected terrorist — they find out only when they go to the ATM or at a store checkout. Then they often have no idea what they did to warrant suspicion, and “can be forced to wait years until a determination is made, during which time their assets remain frozen,” the report states.

“I have never understood why my name was put on this list. I was never interviewed by you or had any communication from you or any of your officers or representatives,” another person wrote to the Treasury. “I have no doubt that had you chosen to interview me . . . you would have not taken the decision you did at the time.”

The Treasury Department told CNNMoney that it doesn’t tell people that they are suspected of being a terrorist because that would give them the opportunity to hide their money before the government is able to freeze it. But it said it makes a public statement once someone is officially added to the list, and that it goes through many efforts to ensure that the designation is deserved — including conducting an “extensive investigation” and a “rigorous review” of any evidence.

Once you’re on the list, it’s a battle to get off — the process is murky and not having access to funds makes it that much harder to hire legal counsel or other assistance, according to the LCCR report.

The Treasury Department said that people are able to contact it immediately if they believe they should be removed from the list. If that doesn’t work, they can challenge the designation in a U.S. district court.

There are currently more than 800 people, organizations and companies on the list, which also includes drug traffickers. The full list is public here.

Property: to buy or not to buy?

Property expert Chris Gray talks to moneysaverHQ’s Moira Geddes about current property market conditions and settles the score over whether to buy or rent.

Is home ownership weighing you down? There could be a reason for that. Illustration: John

Is home ownership weighing you down? There could be a reason for that. Illustration: John Tiedemann
Source: News Limited

BELIEF in the financial benefit of home ownership is a deeply held conviction for many Australians.

Rent money is dead money. You have to get a foot in the door before it’s too late; the financial advice from parents and peers comes thick and fast.

(Declaration of interest: I rent.)

But a new paper by two researchers at the Reserve Bank, Ryan Fox and Peter Tulip, has committed the financial equivalent of blasphemy by casting doubt on whether it’s always better to buy. (Declaration from the authors: one owns and one rents).

Their startling discovery is that over the past 60 years, the average cost of home ownership (after any offsetting increase in home value) has been about the same as the average cost of renting.

The historical answer to the age-old question of whether it’s best to rent or buy? It’s a lineball call.

But how can that be, when we all know house prices have gone through the roof?

Well, in calculating the benefits of home ownership, most people overlook the significant — and often hidden — costs of home ownership.

For renters, they pay rent and that’s where the buck stops.

But homeowners face a myriad of costs including interest on their mortgage (which is substantial over the life of a loan), ongoing running costs like council rates and water, the need to invest in home improvements and significant transaction costs, like stamp duty and conveyancing fees.

These significant costs must be deducted from any increase in house prices.

And the long run average increase in house prices is not as large as most people probably think.

While property moves in cycles, the value of the average home has only grown by an average of 2.4 per cent plus inflation over the past 60 years.

Owning a home has proved about as expensive as renting.

So should you rent versus buy? It turns out that depends entirely on where you think house prices are heading from here.

House prices ... where to from here?

House prices … where to from here?
Source: Supplied

“If real house prices grow at their historical average pace, then owning a home is about as expensive as renting,” the authors of the paper state.

If house prices were to grow more quickly, you’d be better off buying.

However, “if prices grow more slowly, as some forecasters predict, the framework used in this paper suggest that the average homebuyer would be financially better off renting.”

Where is that crystal ball when you need it?

House prices are notoriously unpredictable and depend upon many factors including population growth and the pace at which new homes can be built.

The real point of the Reserve’s research was not to provide financial advice about whether to rent or buy, but to test whether house prices — high historically compared to incomes — are overvalued. The title of their paper was, after all, “Is Housing Overvalued”.

They find that while it’s true that house prices have risen dramatically compared to incomes, that doesn’t necessarily mean they are overvalued — particularly given the shift to structurally lower interest rates which has boosted borrowing capacity.

Fox and Tulip prefer a different yardstick for whether property is overvalued: whether people are paying significantly more to own a home than to rent it.

Their conclusion is: we’re not.

“Recent data do not show signs of a bubble,” they find.

So would-be homeowners waiting for prices to fall before they enter the market could well end up frustrated.

Those looking for an easy answer to the question of rent versus buy will be disappointed by the Reserve’s research. In short, the answer is: it depends.

It depends on future house price growth in the area in which you plan to buy.

It also depends how long you intend to stay in a property — with longer stays shifting the equation in favour of buying. Staying longer in a home — the typical owner stays for 10 years — spreads out the upfront cost of stamp duty. And given property prices move in cycles, longer stays make you less exposed to a couple of years of weak house price growth.

Whether it makes sense to buy or rent also depends on your personal preferences. Do you value the security of homeownership and the ability to drive nails into walls? Or do you value the flexibility and freedom to move that renting brings?

The Reserve Bank hasn’t answered any of these questions for you.

What it has shown is that, over a long period of time, the cost of renting has been about on par with the cost of owning.

Main message: don’t assume it’s always best to buy. If house prices grow at below their long term average pace, it may well be better to rent.

Property ownership is not worth it at any cost.

Originally published as Property: to buy or not to buy?

6 great American road trips

road trip utah

Route 191 runs through some of the great landscapes of the Southwest

  • Trip length: 197 miles from Moab, UT, to Chinle, AZ

The scenery along Route 191 is spectacular any time of year. This red-rock country is a geological fairyland of arches, slot canyons, natural bridges and balancing rocks.

The road bisects the Colorado Plateau, which boasts one of the highest concentrations of national parks, monuments and recreational areas in the country. Just off 191 are Arches and Canyonlands National Parks; a short drive away are natural bridges, Grand Staircase-Escalante National Monument and Glen Canyon.

Outside Chinle, Ariz., lies Canyon de Chelly (pronounced “shay”) National Monument. This Navajo land features old cliff dwellings and Spider Rock, a thin sandstone spire that soars 750 feet from the canyon bed.

The scenic trails in Utah’s national parks lure many hikers. Be sure to wear some red to attract hummingbirds. There’s also whitewater rafting, kayaking, rock climbing and mountain biking.

Senate chaos to help your hip pocket

The Abbott government has again passed carbon tax repeal legislation through the lower house of parliament.

MOTORISTS won’t have to pay higher petrol taxes from August 1 as planned after the government today parked legislation to increase the excise because it wouldn’t pass the Senate.

And the government has again deferred a final vote to scrap the carbon tax in the upper house by instead moving a bill to dismantle Labor’s mining tax.

The carbon price repeal was to have been a priority today, but the government is still negotiating with crossbenchers.

A number of measures meant to start on July 1, such as changes to family tax benefits, have already been put off because the government can’t guarantee it will win a Senate vote.

Refueling. Petrol pump. Bowser. Thinkstock. Generic image.

Petrol prices will not rise on August 1, as planned.
Source: Supplied

The bid to add some $2.2 billion to fuel excise over four years and fund massive roadworks would not get the votes of Labor, the Greens, or at least four of the 10 crossbench senators — three from the Palmer United Party and the Australian Motoring Enthusiast Party’s Ricky Muir.

The government instead immediately moved legislation that would dismantle the Labor government’s mining tax, an indication it is not yet confident of the numbers to repeal the carbon pricing system.

The twice-a-year increase in fuel excise — frozen since 2001 — was to have started this August but Parliament will rise for a five-week break on Thursday without dealing with the legislation.

It was one of the most contentious measures in the May Budget. The twice-a-year excise jump would add just 55¢ a week to a family’s petrol expenses in its first year, according to the government.

Prime Minister Tony Abbott in question time today. Picture: Gary Ramage

Prime Minister Tony Abbott in question time today. Picture: Gary Ramage
Source: News Corp Australia

However, the Greens have complained the money raised will go to roadworks and increased use of cars, while low-income families will not get better public transport connections to avoid the tax rise.

The Senate standoff also threatens Tony Abbott’s ambitions to be remembered as the “Infrastructure Prime Minister”.

The government’s decision was revealed in a motion to “rearrange government business” moved as soon as the Senate opened for business this afternoon.

Motorists can expected some relief at the bowser.

Motorists can expected some relief at the bowser.
Source: News Limited

24 hours with the CEO of Lyft



Running one of the hottest startups in Silicon Valley, Lyft co-founder and CEO Logan Green is never actually off duty.

Over the last couple years, ride-sharing platform Lyft — recognizable by its pink mustache logo — has quickly transformed from a scrappy startup to a full-fledged company.

The service uses a mobile app to connect people looking for a ride with drivers — who can be anyone wanting to make a little extra money by picking people up. Based in San Francisco, it’s now available in 31 states and most recently launched in New York.

With 300 employees and $330 million in funding from prominent Silicon Valley investors, Green, 31, is constantly on the move. And when he’s not running the company, he’s moonlighting as a Lyft driver, picking up passengers on the go.

Here are journal entries from a day in his life:

<!–Translated from Spanish by the fast food employees’ union she is part of, Workers Organizing Committee of Chicago–>

7:00 AM

I wake up and walk down the street to the gym. I typically work out 20-30 minutes every morning to get the day started.

8:30 AM

Grab a Lyft and head into the office. To get to the office every day, I either take a Lyft or have my wife drop me off. It’s about a 15-minute drive from my house to the office.

9:00 AM

Today we’re moving from our temporary office in SoMa into our new long-term home in the Mission. The team is meeting at the SoMa office and walking together across town to our new space. This walk allows us to close one chapter as a team, and transition together to the next.

9:30 AM

First day in the new office. Everyone is excited and settling in — it feels a bit like the first day of a new school year. We have an open office layout and I love that you can feel everyone’s energy almost immediately.

We decorated the entry and front desk area with pool noodles wrapped in pink fabric to make it feel as though you are walking through the pink mustache upon entering the office.

9:45 AM

Sync with Peter, my Chief of Staff. I start every day reviewing priorities, prepping for meetings, and getting updated on key projects.

10:00 AM

Weekly 1:1 with Krish, our VP of Finance. Krish is building up his team and today we’re discussing a couple of candidates.

11:00 AM

My weekly market review meeting with the data team. Last week we launched 24 cities in a single day, so there are a lot of new markets to check in on. This data team is responsible for market health across all of Lyft’s 60 cities.

12:15 PM

Lunch with the team. Everyone eats together in a communal area – it’s a tradition we’ve had since our early days. I’ve always been impressed with how something as simple as group lunch brings the team together, even as we’re quickly approaching 300 employees. The company offers lunch each day, and it’s served buffet style in the open eating area.

1:00 PM

I try to block a couple of hours of unscheduled time every day, so that I can work on the day’s most important projects. Today, I’m using this time to work with a small group from the engineering team on a stealth, long-term project that will have a big impact on the company down the road.

3:00 PM

Final stage interview with a senior engineering candidate. Hiring senior engineers is a top priority as the company grows.

4:00 PM

Reviewing operations and product details for a new offering — Lyft’s modern take on a premium ride experience. It’s something several of the teams have been working hard on for months, and we’re opening up a waitlist to passengers who want to try the new service this week.

5:00 PM

My co-founder John and I quickly review notes for the All-Hands, our bi-weekly meeting with the whole team.

5:15 PM

John and I speak at our first All-Hands in the new office. The meetings, which serve to update the entire team on our most important metrics and announcements, usually open with Paul, one of our earliest team members who has done a great job as unofficial driver of team culture, introducing — and roasting — each new team member.

Today’s transition was a great opportunity to talk about company history. In the last year the team has grown from 50 to 250, so most people on the team haven’t heard the history of how we started out in the “Apartffice” in Palo Alto (our old apartment that doubled as the company’s first office).

7:45 PM

Ordering dinner from Sprig, a new on-demand food delivery service, for myself, John, and other team members staying late to work on projects.

10:00 PM

Continue replying to emails. I receive a couple hundred every day, so this is my time to get caught up after the day’s meetings.

<!–View More 24 Hours Headlines–>

Readers: What’s it like to spend 24 hours in your shoes? Email for the chance to be profiled in an upcoming story.

Samsung supplier embroiled in child labour scandal

SAMSUNG Electronics Co. said it has suspended business ties with a Chinese supplier that

SAMSUNG Electronics Co. said it has suspended business ties with a Chinese supplier that allegedly hired children.
Source: AFP

SAMSUNG Electronics Co. said it has suspended business ties with a Chinese supplier that allegedly hired children.

The South Korean company, which is the world’s biggest smartphone maker, said in its blog Monday that it had found possible evidence of child labour and illegal hiring at Dongguan Shinyang Electronics Co.

Samsung said last week it would urgently look into the Chinese supplier following a New York-based watchdog’s report that it hired at least five children under the age of 16.

China Labor Watch said children as well as minors under 18 worked at Shinyang for three to six months to meet production targets during a period of high demand. The watchdog said the child workers were paid for 10 hours a day but worked 11 hours.

The report detailed 15 labour violations discovered during its undercover investigation. They included child labour, the absence of safety training, no overtime wages and no social insurance for temporary workers, who constituted at least 40 per cent of 1,200 employees at the Chinese mobile phone parts supplier for Samsung.

China Labour Watch’s report came shortly after Samsung said its audit found no child labour at hundreds of Chinese suppliers. Samsung began inspecting its Chinese suppliers after the labour watchdog raised the child labour issue in 2012.

Samsung said Chinese authorities are investigating the case and if the investigation finds child labour, Samsung will permanently stop doing business with Shinyang.

Best places for vacation home deals

vacation home haines florida

If golf is your game, Haines City is a great affordable second home market.

  • Place: Haines City, Fla.
  • Median home value: $123,000

There are two big advantages to vacation life in Haines City, according to city administrator Jonathan Evans. The first is that several of the best golf courses in the nation are 30 minutes or less away.

Many residents, like Evans himself, live right on a golf course.

Related: 10 most affordable small cities

The second is home prices. “You can build a new home here for $50 to $60 a square foot,” he said. “It’s very affordable.”

Existing home prices are also low. At a median of $123,000, they’re about two-thirds of the price of a typical U.S. home.

Getting to Haines is easy. Vacationers can fly into either Tampa or Orlando international airports and be less than an hour from their second home. And with both the Atlantic and Gulf coasts within a 90-minute drive, there’s plenty to do, even for non-golfers.

DJs to be foreign-owned as offer approved

Shareholders are voting on David Jones’ fate on Monday morning.

Shareholders are voting on David Jones’ fate on Monday morning.
Source: AFP

DAVID Jones shareholders have overwhelmingly backed a $2.2 billion foreign takeover of Australia’s oldest department store.

Almost 97 per cent of shares were voted to accept the $4-a-share offer from South African retailer Woolworths Holdings – well above the 75 per threshold needed for the bid to succeed.

Some shareholders expressed concern about the sale of an “iconic” Australian business, but chairman Gordon Cairns said the offer was a “significant premium” on the value of their shares. He said the takeover was the best way forward for the department store.

“We believe this takeover is good for shareholders, customers and staff,” he told the shareholder meeting in Sydney on Monday.

Solomon Lew with former DJs boss Mark McInnes.

Solomon Lew with former DJs boss Mark McInnes.
Source: Supplied

There had been concern billionaire Solomon Lew, who owns 9.9 per cent of David Jones could move to block the takeover amid a dispute with Woolworths SA about fashion retailer Country Road.

However, there was no word from Mr Lew or his representative at the meeting, but he appears to have abstained from the vote. Woolworths has offered to buy Mr Lew’s 12 per cent stake in Country Road for more than $200 million in order to get the David Jones takeover across the line.

Some shareholders criticised the deal, arguing the money should have instead been used to increase the $4 a share offer.

Woolworths chief executive Ian Moir was not at the meeting after being advised by doctors not to fly following a back operation two weeks ago.

David Jones entered a trading halt ahead of the meeting. The stock last traded at $3.93.

Wall Street’s new happy hour: Liquid alts

liquid alternatives


After a long day of trading, Wall Street hot shots are known to enjoy a fine beverage or two. But when it comes to liquid alternative investments, they’re darn near drunk.

Liquid alternative funds are akin to hedge funds for mom and pop investors. Instead of simply investing in stocks or bonds, these special funds use sophisticated techniques to bet on whether equities and bonds will move up or down. They also use borrowed money to amplify returns.

The idea is to generate steady, positive returns.

These funds have exploded in recent years. There are currently 455 liquid alternative funds with about $154 billion in assets, more than double the 217 funds that managed a mere $38 billion in 2008, according to data from Morningstar.

Benefits of liquid alternatives: Brian Kloss, who manages a $126 million bond-focused liquid alternative fund for Brandywine Global, believes that investors have flocked to these kinds of investments since the financial crisis because they aim to guard against the ups and downs of the broader market.

“When market valuations go to extremes, it’s important to protect yourself,” he says.

For example, unlike a conventional bond fund that will typically bet on rising bond prices, Kloss has the ability wager that they will fall. That approach, known in Wall Street parlance as “going short,” served him particularly well during the European debt crisis, when he made a profit by shorting bonds of major U.S. investment banks that had significant exposure to Europe.

Related: Is Puerto Rico going to default?

Perhaps the most attractive aspect of liquid alternatives is that they are after all, liquid. That means investors can pull their money out at any time. That’s in contrast to many high octane hedge funds and private equity firms that require so-called lockup periods in which investors can’t redeem their money for a set period of time.

Higher fees: Still, there are many things to consider before diving into liquid alternatives. For one, they’re more expensive than your classic mutual fund or ETF. The average minimum investment is around $6,000, Morningstar data shows. Of course, that’s far less than the $500,000 that hedge funds with similar investment strategies often require investors to pony up.

Related: The unglamorous life of hedge fund startups

Then there are the fees. The average expense ratio for a liquid alternative fund is about 1.8%, but some go as high as 2.5%, according to Josh Charlson, director of alternatives strategy for Morningstar. That’s compared to 1.31% for the average stock-focused mutual fund and 0.97% for the average bond fund.

The average ETF, which tracks an index or basket of stocks, has an equally weighted expense ratio of just .6%.

Performance should also be taken into account: While the S&P 500 has gained over 6% so far this year, liquid alternatives have returned a paltry 1.4%. In theory, liquid alternatives should do better when the market hits a snag.

“When markets are struggling, that’s when you really want to outperform,” Kloss asserts.

Charlson echoed that sentiment, and believes that record stock prices have actually had the effect of driving more investors into liquid alternatives.

“With the market having gone straight up for the last few years, there’s more anxiety right now and I think investors are looking for ways to put protection into their portfolio,” he says.

Running of the bull markets

SEC concern: But while liquid alternatives have been successful in drawing interest from investors, they’ve also caught the attention of the Securities and Exchange Commission.

The agency lists alternative investment companies under its “heightened risk” examination priorities for this year. Specifically, it’s looking at the funds’ trading techniques, compliance staff, and marketing practices.

Charlson says it’s not surprising that the SEC wants to take a closer look into liquid alternatives, but he doesn’t foresee them finding any major widespread problems. He did however say that there could be instances in which start-up funds get in trouble for not having the right risk management systems in place.

He also warns that some fund managers are using the asset class’ newfound popularity as a way to charge higher fees and increase revenue. Investors need to do their homework before dipping into the liquid alternative pool.