Jobkeeper bonanza

Select to expand quote

Imax1 said..
What happens to the retired people that have worked all their lives to have a couple rentals to live off , when the tenants don't have to pay . Who's looking after those people ?

Yeah, that's a curve ball for sure. A self-funded retiree with 2 or 3 units probably thought they had a guaranteed $1200/wk for life, more or less indexed to inflation, and not really caring about the ups and downs of the property market. Suddenly, nothing coming in. In what scenario would they ever have dreamed up having to deal with that?

Simple fix
Pressure banks into a 6 mth freeze then added to loan term, ie if you've 10 years to run you now have 10 years and 6 maths, this is lawfully passed on to tennants
This as many other countries has shown eleviates pressure of claim for welfare assistance due to being the prime household outgoing
The australian model will take decades to pay back

F#####g banks rule this joint

Select to expand quote

Paddles B'mere said..
You should never put yourself in the position where you are reliant on something as unreliable as an investment return just to survive.

I am not getting what you are saying there Paddles.

If a person wants to be a self funded retiree i.e. not have to go out to earn an income and not be reliant on welfare at all, what other source of income can there be except from "investments"???

Refer Mr Milk's post above. We have seen that super is not reliable which consists of "investments".

I have an investment in an unlisted property trust (return and capital not guarenteed) with a well known and trusted property management company where the tenant is the state government. It has been very reliable with money in my bank every month for the last 7 years and running at better than 9% p/a tax advantaged.

I got out of commercial rental investments due to their unreliability and have moved into residential rentals targeted at working people. That has been very reliable when managed by a professional agent.

Are not rental returns:- "just a pension drawn down from the capital value of the investment"???

Please clarify what you have said. Cheers.

What I'm getting at Cisco is that reward is proportional to risk when it comes to investment. If a self funded retiree puts himself into a financial position where he/she requires a fixed/budgeted return on an investment in order to survive/exist then they have placed themselves in a risky position as opposed to a self funded retiree that pays themselves a pension from their resources that will be available "rain, hail or shine".

So a self funded retiree with a fairly liquid investment that is low risk and low return (the three things all go hand in hand) can expect to be able to get themselves a "pension" from the investment that is unaffected by the income that the investment generates, however it may be reducing the capital value of the investment.

If a self funded retiree decides that the return on a low risk investment is not acceptable to him/her, then they might decide to invest in a less liquid asset that makes better returns like a rental property. However they must accept the risk that goes with this type of investment and understand that there may be times that there is no return, or maybe (heaven forbid) a negative return.

I'm just saying that if you are a self funded retiree it is generally desirable to make sure that you have an assured income to enjoy your retirement and that being 100% reliant on a rent payment coming in from a investment to pay for your everyday costs of living is not usually a desirable risk for a self funded retiree. In layman's terms you can't have your bread buttered on both sides.

The irony is, that there was no irony. The reality is, that if your sole source of revenue is rent and the rent doesn't come in, you can't chip a few bricks off the corner of your rental property to go and buy milk and bread, therein lies the risk for a self funded retiree. For someone like you or I Harrow, well we're still working so we just use some of our income to buy bread and milk if the tenants don't pay so the risk to our lifestyle is reduced.

Bwahahaha ................... that's the $64m question ............................. or $100m in today's money

I reckon MM is on the money, not too many retirees will be affected, but if you're retired and rolled the dice on a less liquid, higher return investment to fund your retirement years then your cash flows may be affected but you put yourself there chasing a few extra bucks and hopefully you've got a contingency because the government won't be giving you anything because you've already got money (tied up of course).

Select to expand quote

cisco said..
If the current situation causes a total economic and social collapse I think all bets are off.

As I said earlier, I always thought one answer to that was to own a couple of units, as you'd always have a reasonably steady stream of rent coming in. How wrong is that thinking now. I guess you need a bit of everything, including a veggie garden and a fair share of luck!

One of the best pieces of advice for younger people is "Dig your well before you get thirsty."

Select to expand quote

Paddles B'mere said..
Bwahahaha ................... that's the $64m question ............................. or $100m in today's money

I reckon MM is on the money, not too many retirees will be affected, but if you're retired and rolled the dice on a less liquid, higher return investment to fund your retirement years then your cash flows may be affected but you put yourself there chasing a few extra bucks and hopefully you've got a contingency because the government won't be giving you anything because you've already got money (tied up of course).

Assuming that the real estate isn't carrying a lot of debt, why wouldn't the rich retiree be able to get money from the bank? S/he has great collateral.

i'm no financial expert but if governments are printing money and anyone can loan money for next to nothing , how can retirees,or anyone for that matter expect their money to "make money" ? unless it's wildly speculative and risky?
honest question as to where we are heading.

Select to expand quote

Paddles B'mere said..
The honest answer Agent000 is ................ they can't

They will just have to be drawing down more on their liquid capital and if they; or their financial advisor; have convinced them into not having enough liquid capital to survive then they'll be forced to sell a non-liquid asset in a falling market.

Exactly right Paddles.
We are self funded retirees and upon retirement 12 years ago I spoke to a switched on accountant
who advised to have enough cash set aside to live on for a year or two if necessary and invest the rest .( shares for me) The interest rate was a bit more attractive back then and that cash we put aside grew in the first 7 years. We are planning on using those funds if dividends dry up and keep our investments intact.
A comfortable retirement income for a couple is around $55/60,000 pa. $5000 of that goes to private health and I can guarantee you will thank the day you have it as aside from cost of surgery you can have it immediatly.
At some point you will make the decision ' Am I building assets to give the kids when I go or have a comfortable life' . You can do both but to what degree depends on you .
Of course if your the one looking at a comfortable inheritance why worry.

Here is a brilliant idea, let's give gen Z $20,000 each to do with what they want, splurge on anything. Better yet let's give them their own money so doesn't cost the government a cent. That's sure to help the economy keep moving. But who would come up with an idea like that?

Some will see an increase to $750/week (taxed) plus a rent reduction, perhaps even to $0:

www.reiq.com/wp-content/uploads/2020/04/REIQ-Open-Letter-to-Landlords.pdf

There are definitely some that will experience the next 6-12 months, or more, as a bonanza.

I wonder in the longer term if there is going to be any criminal prosecutions for those that go awol after 6 months or should I say 12 months as its going to take another 6 months or more for the paperwork to done to evict.

Select to expand quote

kevinwd1 said..
So do 16 year old high school students qualify for this payment? .My daughter reckons some of her high school mates will be getting paid $750 dollars to go to school??.They meet the criteria as they have been working part time for more than 12 months for employers that have closed

As long as you are 16 or over and employed for 12 months, you qualify for the $750, even if you were only earning $20/wk from your part-time job. Whether you go to school or not plays no part in it.

My two eldest kids are getting it already, but the youngest is 15 1/2 years old, and so has missed out. She's not a happy camper watching her two elder siblings get a $20K handout while she gets nothing.