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Re: New Super - pay cut?
Aus Post is definitely paying the Super for all 37K of its Employees. I think you'll find everyone on Award wages will have the super increase paid by the employer.
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Re: New Super - pay cut?
I am already providing 15% to my staff so no change needed:D
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Re: New Super - pay cut?
Originally Posted by ABCD......
(Post 10794707)
For other people though, that $100 worth of shares (costing $117 of before tax income) will cost between:
$135 for those earning $37k to $80k or $147 for those earning over $80k of 'before tax' income. I personally believe in managing my own super, but many people would not do it, and prefer to rely on anyone else. Before the Compulsory Super came in, very few people did pay any super voluntarily, even though they had the option. I do feel that in the circumstances, what we have is the lesser evil. But at least we do have the option, if we wish, to choose how it gets invested, to a degree. Thus cost of share $70 approx,interest is $3.50 @ 5%.This is a tax deduction that the masses love so much.Total cost for the average taxpayer is $3.50 minus marginal tax rate (32.5 %).Total income using the divi for last year was $3.61 plus franking credits (30%).So 2.5% tax will be paid on the divi plus medicare levy on the full sum,($3.61 plus franking credits).The interest of course reduces taxable income. You have totally missed the point (leverage,using other people's money). Before super many companies had far better pension schemes,however as we now operate under DC rather the DB schemes the risk has been moved from companies to individuals.I don't know if this is good or bad and the variables are huge,company goes bust you lose everything etc etc. To explain simply what you stated,take the money as wages and you pay 32.5% tax on it.Put it into super and you pay 15%,plus all the ongoing costs.The tax advantages are obvious,the greater tax advantages of keeping it out of super are equally obvious. Further arguments are the money going into super reduces GDP and tax to the govt,you can't touch it until conditions of release are met,and old people are not really good consumers,young people are as they buy houses and furnish them.The variables as I said are far too great.The facts can never be disputed. When it was fashionable to take advice from real estate salesmen (put a house into super,an SMSF) as I said at the time bad advice,there are liquidity problems and 4% compliance problems,the income from a house is greatly reduced by the heavy holding costs.This would produce the 4% drawdown problems in pension mode. At the time I explained buy 100k of ANZ shares outside of super,use the DRP.Nobody is ever going to check how that goes,nobody will ever seek out truth and reality.That was before the crash,the perfectly wrong time to buy.Luckily, and obviously, financial markets are very forgiving.That was six or seven yrs ago,which means you now have approx $180-190k of ANZ shares.Far better than the $ cost average and diversify nonsense.Far better performance than they have had from super funds.The facts will still be there every day,the crowd will still refuse to see them every day.Compounding will still make people wealthy,they will still have no idea what compounding is. As for an SMSF the advisor that will get the $4-6k for compliance costs is the person advising to open an SMSF,what other advice would you expect from them? Geordie downunder. |
Re: New Super - pay cut?
Originally Posted by swans
(Post 10799026)
You are correct but that is not the point I made.I said borrow the money,thus the cost is $0(all wealth is free)
Thus cost of share $70 approx,interest is $3.50 @ 5%.This is a tax deduction that the masses love so much.Total cost for the average taxpayer is $3.50 minus marginal tax rate (32.5 %).Total income using the divi for last year was $3.61 plus franking credits (30%).So 2.5% tax will be paid on the divi plus medicare levy on the full sum,($3.61 plus franking credits).The interest of course reduces taxable income. You have totally missed the point (leverage,using other people's money). Before super many companies had far better pension schemes,however as we now operate under DC rather the DB schemes the risk has been moved from companies to individuals.I don't know if this is good or bad and the variables are huge,company goes bust you lose everything etc etc. To explain simply what you stated,take the money as wages and you pay 32.5% tax on it.Put it into super and you pay 15%,plus all the ongoing costs.The tax advantages are obvious,the greater tax advantages of keeping it out of super are equally obvious. Further arguments are the money going into super reduces GDP and tax to the govt,you can't touch it until conditions of release are met,and old people are not really good consumers,young people are as they buy houses and furnish them.The variables as I said are far too great.The facts can never be disputed. When it was fashionable to take advice from real estate salesmen (put a house into super,an SMSF) as I said at the time bad advice,there are liquidity problems and 4% compliance problems,the income from a house is greatly reduced by the heavy holding costs.This would produce the 4% drawdown problems in pension mode. At the time I explained buy 100k of ANZ shares outside of super,use the DRP.Nobody is ever going to check how that goes,nobody will ever seek out truth and reality.That was before the crash,the perfectly wrong time to buy.Luckily, and obviously, financial markets are very forgiving.That was six or seven yrs ago,which means you now have approx $180-190k of ANZ shares.Far better than the $ cost average and diversify nonsense.Far better performance than they have had from super funds.The facts will still be there every day,the crowd will still refuse to see them every day.Compounding will still make people wealthy,they will still have no idea what compounding is. As for an SMSF the advisor that will get the $4-6k for compliance costs is the person advising to open an SMSF,what other advice would you expect from them? Geordie downunder. If you can work out why the 1st $million is always the hardest then you are understanding compounding. Three normal scenarios,buy a house,see how long before it is worth a $million,tax advantages are tax free growth,but paid for out of after tax income.Charges are rates,repairs etc.Stamp duty. The $100k of ANZ stock,tax free growth (never sell) almost tax free income,rebate of franking credits when you retire.Paid for out of before tax income by using the DRP.No charges apart from initial 0.3% brokerage. Super,taxed @ 15%,taxed on growth,although franking credits will greatly reduce that tax,those charges every year without fail. Two have no diversification,one has,which do you think will produce a comfortable retirement. I know which I chose for wealth creation,and still do.We'll leave options alone, that really is leverage,huge gains,but also huge losses if you do not know what you are doing.Ignorance really is bliss when it comes to options ,and to an extent leverage.Everyone uses leverage if they have a mortgage though. Geordie downunder |
Re: New Super - pay cut?
To complicated, and somewhat risky, for many.
Plain old Super becomes even less complex ;) |
Re: New Super - pay cut?
Originally Posted by ABCD......
(Post 10799399)
To complicated, and somewhat risky, for many.
Plain old Super becomes even less complex ;) So if your super fund buys shares it is not risky,CBA will be their largest shareholding at market weight.If you buy CBA on your own account it is risky ,who would've thought it. As I said,what other advice would you expect from the financial industry (yourself).Give your money to me so I can take a cut.The wonderful W Buffett quote,the role of the financial industry is to get people to do the exact opposite to what they should be doing. More facts to refuse to see,CBA is more liquid than the market.The high for CBA was $62,the high for the market ,ASX all ords 6800.Along comes the crash and CBA plunges to $24 approx,forced sales of a highly liquid stock.The market plunges to 3100 approx,a lot of illiquid shares that no one will want to buy when the shit hits the fan.Bottom is march 2009. Approx 6 months later the CBA shares are back up to $60 and then wallow up and down until end of june last year.From june last year to today up to around $72,CBA returns around 40% for the year including dividends. Don't forget,when they announce profit in august, run around bleating about,too much profit,why doesn't the govt do something about it. To point out the obvious again ,it is too risky to be part owner of a company that makes huge profits,who'd have thought it. geordie downunder |
Re: New Super - pay cut?
Originally Posted by swans
(Post 10804201)
Amazing the nonsense people come out with to fool themselves.
So if your super fund buys shares it is not risky,CBA will be their largest shareholding at market weight.If you buy CBA on your own account it is risky ,who would've thought it. As I said,what other advice would you expect from the financial industry (yourself).Give your money to me so I can take a cut.The wonderful W Buffett quote,the role of the financial industry is to get people to do the exact opposite to what they should be doing. More facts to refuse to see,CBA is more liquid than the market.The high for CBA was $62,the high for the market ,ASX all ords 6800.Along comes the crash and CBA plunges to $24 approx,forced sales of a highly liquid stock.The market plunges to 3100 approx,a lot of illiquid shares that no one will want to buy when the shit hits the fan.Bottom is march 2009. Approx 6 months later the CBA shares are back up to $60 and then wallow up and down until end of june last year.From june last year to today up to around $72,CBA returns around 40% for the year including dividends. Don't forget,when they announce profit in august, run around bleating about,too much profit,why doesn't the govt do something about it. To point out the obvious again ,it is too risky to be part owner of a company that makes huge profits,who'd have thought it. geordie downunder |
Re: New Super - pay cut?
Is everyone else bored with this one hit pony?:p
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Re: New Super - pay cut?
actually he is making sense.
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Re: New Super - pay cut?
Originally Posted by swans
(Post 10804212)
I should also add.Super funds hold around 45% of CBA stock ,around $55 billion.Liquidity will disappear if they choose(are forced) to sell,they can only sell to some other pension fund, off market ,at a loss, when liquidity dries up.A retail share holder can be out at the press of the sell button almost instantly.Liquidity does not disappear if 1000 shares hit the market.
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Re: New Super - pay cut?
Originally Posted by commonwealth
(Post 10804613)
actually he is making sense.
I'm interested in this too - The strategy - at least outwardly - seems sound... S |
Re: New Super - pay cut?
Originally Posted by Swerv-o
(Post 10805622)
I'm interested in this too - The strategy - at least outwardly - seems sound...
S I still think super is an overall good system - and most people have no choice anyway |
Re: New Super - pay cut?
Originally Posted by Amazulu
(Post 10805668)
Indeed. Blue-chip investment is not a bad idea
I still think super is an overall good system - and most people have no choice anyway No, they make it very difficult to opt out of super - The compliance costs for SMSF are large, and the benefits are not outweighed until you have a couple hundred thousand in the pot.. S |
Re: New Super - pay cut?
Originally Posted by Swerv-o
(Post 10805672)
No, they make it very difficult to opt out of super - The compliance costs for SMSF are large, and the benefits are not outweighed until you have a couple hundred thousand in the pot..
S |
Re: New Super - pay cut?
ING has a product that mimics SMSF but no need for additional compliance stuff.
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