Hi Craig,
I like the idea of a broader based consumption tax actually, and while I believe some people CHOOSE to spend unwisely, I don’t believe all “poor” people choose to be short of a buck. They are often the victim of circumstance. Not always, but often… every individual has their own story to tell.
Cheers
rnice to see you there Broz- I was beginning to think Fudge had made you up [
]Shaun, I understand your frustration. What I think is that we all take our time with different things. For example, I didn’t and probably *couldn’t* invest in RE until I was 29- I just had a block about it. Some people don’t have children until late in life because they’re not ready for it, and some people find the job they finally love late in life- if ever. We’re all at different stages, and sometimes the things we can’t actually “hear” at a certain time in life, make sense later on down the track.
Probably next time you want to be intimate with her, she’ll get a look in her eye and say, “shaun- get out the calculator! i wanna positively gear with that 20K!” And then, you’ll realise it’s her time to start thinking about those things.
Sounds like if she’s got 20K saved, she’s doing pretty well. Some people probably get scared about investing too, because it can take so long to save money, and they may fear losing it by making a mistake. I guess as she has a child, she wants to make sure the little one is secure too- she might feel like she can’t afford to make a mistake. I think it’s often when we have more money, and therefore feel more secure, that even if we make a loss, we’ll still be ok. But the less we have, the more we have to lose.
kay henry
Craig and Richmond,
I concur. I had hoped that the new tax system would have been closer to that which you have just described.
Lower income tax, with higher luxury item tax. Scotch at $50 a bottle and smokes at $20 a packet. I drink and smoke by the way. But the luxury tax could also be reimbursed in part to primary industry, to keep milk at 20c a litre and bread at 20c a loaf. Staple items are therefore affordable to all, and luxury spending remains a choice.
Gotta go, the slow response time on this computer is driving me nuts.
Kind regards, Phil
Hi everyone,
I liked Rich Dad’s approach so much that I am doing it myself.
1. Start a (part-time) business. Make it part-time if you still want to work and have a reasonable income to go on with.
2. As a registered ABN, we get to claim lots of legitimate expenses as tax deductions that we otherwise couldn’t, thus reducing our tax burden.
3. Take the profits from the business and re-invest it in property (or anywhere else). This way you are using pre-tax dollars to invest instead of after-tax.
I think the tax system places too much burden on PAYE people but that exactly what it was designed to do. My complaining won’t change it so I prefer to work around it. There are plenty of legal and ethical ways of reducing your tax. I remember John Howard stating a few years ago that it was every Australian’s duty to minimise their tax. I am a PAYE as well as a small business owner and we get a hefty tax refund at the end of the year. It also pays to have a good accountant.
Cheers,
David [
]OPM – use Other People’s Money and learn from Other People’s Mistakes
[email protected]Sorry, I just couldn’t bite my tongue any longer.
“People are poor because they choose to be poor”
“I worked hard at school, so I deserve to earn more money than some one who didn’t”
What a load of crap!
Most people are poor because they don’t know how, and don’t have the skills to be anything different, and have no real reason to change. Yes there are dole bludgers out there, but in my opinion most stay on the dole because of the way the system works.
I was on the dole a couple of years ago. To keep the house I owned and feed my family, I needed to find a permanent job that paid a minimum of $30k per year. I was prepared to find temporary work in the meantime, but this meant two things.
1. Working for minimum wage meant that I would bring home, after tax, about a maximum of $2.50 per hour over and above my Centerlink payments, assuming of course I could find full time work. Would you work 38 hours per week for $2.50 per hour?
2. Working for any reasonable amount of time for minimum wage substantially hampered my efforts to find a $30k per year job. It is also extremely difficult to find any sort of job if your prospective employer thinks you are likely to take off at the first opportunity
In the end, I found that it was far better not to work, but to keep looking for suitable employment.
Asking how people on welfare can afford cigarettes or alcohol just misses the point entirely. Why not ban them from having kids? This would certainly keep their costs down and help them to get ahead in the long term. (Oh wait, some people want those kids to grow up, get jobs, and pay taxes to help support them to do nothing when they retire, so better cancel that idea.)
People on welfare learn to live on welfare, but don’t learn how to get off of it. The system keeps them, and their families trapped in the system, with very little hope of ever getting out, because the reward of getting out in most cases does not measure up to the effort involved in doing so. How they spend their money has absolutely no bearing on how they spend their lives, and very little bearing on how they can get out of the welfare trap.
The reason I was unemployed in the first place was that the business my farther had started and operated for 35 years, and that he had intended to pass over to me, went broke due to one poor business decision. This left my chosen career path at some what of a dead end.
My father works as hard as anyone else I have ever met. He left school at age 12, started working the next day and has worked very hard every day ever since. He opened his own business. After 35 years working at least 50 hours per week, 50 weeks of the year, he never earned more than an equivalent today of $50k per year, and most years it was a lot less. Now he has to work for someone else. Is he worth less than a university graduate with a couple of years experience?
It is a fact of life that if you are good at something you tend to spend time doing it, if you are not so good, you do something else. To suggest that because as a child you were better at school than some one else, you therefore have a God given right to earn more money is absolutely ridiculous.
I’ve been a Uni student on and off for periods longer than I care to admit. One thing I know for sure, not all, but most people at university wouldn’t know what hard work was if it jumped up and bit them on the bum. Yet the majority of them pass and then expect to get high paying jobs, because they worked “hard” for three years.
I work hard now, 45 hours per week, 48 weeks of the year, or 2160 hours per year. A typical uni course is 4 units per semester, 16 to 18 weeks per semester, two semesters per year. For someone at Uni to work as “hard” as I do means that they will need to do at least 15 hours per week per unit, every week of the course, or 60 hours per week for four units. I have never met a student who does even close to this.
People at all levels of income work hard for their money. Effort does not necessarily correspond with reward.
The main gripes in this topic seem to be that people are upset either because they “work hard” to support all the dole bludgers who do nothing but smoke and drink the money away, they pay more tax than some one else, or they pay too much tax full stop.
How can these be overcome?
Reduce the amount of cash people on welfare receive, but replace it with other things to maintain a minimum standard of living. This at least increases the perception of the difference between the advantages of working and staying on welfare.
Reduce tax on low income earners so that there is a real difference between welfare and minimum wage income.
Reduce taxes, charges, and interest rates on small business to encourage growth and employment.
Leave personal tax rates like they are, but increase tax concessions for local expenditure and business investment.
In other words, give people more reason to get off welfare, more reason to earn more money, and more reason to spend that money in the Australian economy, but not necessarily for consumer spending where a significant part of the money flows back to overseas companies.
Dino
“If you don’t know where you are going, every road will take you there.”
Hi Dino,
Well, you just met your first 60+ hours per week student. When I was at uni (1985-87) I had a wife and 3 kids and I used to put in 60 hours or more regularly. Mainly because I loved it. It was a tough course – physics – but it didn’t hurt too much.
I try not to judge anyone else too harshly as you never know where they have come from. I spend time evaluating myself and trying to improve. That takes nearly all my energy so I don’t have much left to be critical of others.
Cheers,
David [
]OPM – use Other People’s Money and learn from Other People’s Mistakes
[email protected]Dino, I couldn’t agree more. I think there are problems with welfare a la rich dad poor dad. It makes it too easy.
I must say I also agree with craig and rich on the consumption tax.
Richmond, firstly I did say that I believed that it was MOSTLY due to peoples choices, I know that there a genuine people out there who do struggle with little way out. (There are always 2 sides to and argument and thus 2 examples of each case.) I just beleive that a lot of it is due to choices. I think our definitions of rich may be different too, I generally mean accumulated wealth in assets. There are plenty of high income people who spend every dollar and if they keep going are more than likely to retire with little unless the choose to do something about it.
I’m sorry for the arrogant tone but I can assure you it wasn’t intentional. One of the problems with the faceless computer. It is just something that I am rather passionate about because I do hate the widening gap between the rich and the poor and the upper/lower class split. I do give damn about this splint hence why i get so worked up about this. I would like to see more help for everyone to be able to become financially independent. I really think education to help people make better choices, things like what phil mentioned about delayed gratification and financial education which our schools do nothing about.
Also as mentioned I do realise how lucky I am. My parents moved from a non democratic country to england and they worked very hard to be able to put me in a position to be in what I consider a well paying job and most importantly having the chance to do well. I thank my lucky stars all the time that I haven’t had to do it ‘tough’. That is why I do want to see changes to education and to help people have choices. I realise that there are some out there that don’t have choices and I would also like to see them helped but I still think that most people are where they are because of choices they have made.
Josh
“I worked hard at school, so I deserve to earn more money than some one who didn’t”What a load of crap!
How so? The whole point of doing well in school is to give yourself options. One of those options is to be able to do a course that will lead to higher pay. The other option of course is not to go to uni, to get into a trade for example and hopefully eventually start their own business in that trade.
If OTOH, someone slacks off in school, the uni door is shut, AND they simply end up doing the 9-5 job with little responsibility and little technical skill, why should they expect to be able to earn anywhere near as much? Why should someone who took the time/effort to get a qualification that leads to better pay, be then asked to subsidise those that didnt put in an effort and who therefore couldn’t go after a well-paying job? You can’t have your cake and eat it too.
As far as uni workloads, they vary from course to course. But I can tell you, I may have had 30hrs/wk of lectures/prac, but I had almost that again in assignments/etc. And that was just as an undergrad. As a postgrad (which is a pre-requisite to work in research), I worked 10-12hrs/day, 6-7 days/wk. And that wasn’t lectures/assignments, that was *work*, the same as any other professional researcher would be doing.
So when someone tells me I don’t deserve better pay than someone that hasn’t put in anywhere near the effort to get where they are that I have to get where I am, they can quite frankly, get stuffed
Also dino
Most people are poor because they don’t know how, and don’t have the skills to be anything different, and have no real reason to change. Yes there are dole bludgers out there, but in my opinion most stay on the dole because of the way the system works.I agree that most people are poor because they don’t know how, but there are those out there who don’t know how but also choose not to find out how.
I con’t know too much about welfare at the moment but i think it does provide people with no real reason to change
JOsh
No worries Monkey Magic…
ps and this isn’t directed necessarily at Monkey Magic or kkowalsk, but why do people worry about what other people are earning for doing whatever? I tend to just focus on what I’m doing, because I don’t know their circumstances, how they got to be wherever they are, or anything like that… Waste of energy I reckon…
Anyway, I’ll leave it at that… this thread’s done for me…
Cheers all,
r []Kay,
I absolutely agree with what you said about being in different places in our life, you said it correctly in a nutshell. (wish i’d said it)
i guess you cant help anyone until they want to help themselves.
i remembered the correct saying too.
if you always do, what you’ve always done
you will always get, what you’ve always got.HOOLEY DOOLEY!! What an introduction to this forum!! This is my first time at this site and I am most certainly being educated… about many things!! At the risk of taking up valuable investor education space, i would like to add a couple of points in reply to what has been noted on the previous 5 pages (and 1/2 hour of my precious time!!) In no particular order:
On dads (and occasionally mums) being slugged or slapped with or however you wish to term child support, how about a shift in attidtude here. There is no doubt payments can seem inequitable. I dont wish to be drawn into a 3 page debate on that, I simply have this comment. Imagine looking your children in the eye and telling them with the same “passion” as you tell other people that you are being “slugged” with a payment for their existance? Can you picture the devastation in their eyes?
Perhaps we should should slip into our vocabularty something like “I proudly pay child support for the welfare of my children, but it impacts me more financially than if my children lived with me.” Both statements indicate that there is (often) a greater financial cost to supporting children living away from you than with you. Which statemnent would you be proud to say to your child?
On people choosing to live rich or poor:
Someone mentioned that it is the choices people make which make them poor rather than choosing to be poor. Both are correct. Some people choose poor because they have victim and welfare mentatlity (through a multidue of life experiences). Many, most I suspect, don’t know they have resources available to persue any other option. Whether reading this from an ivory tower or a middle class brick house, you are reading this because you know (or like me) are learning the answers to the squillions of questions about creating financial (and time) freedom. And here is the clincher…asking questions.
So many people dont know what questions to ask. They dont know the subject to ask questions about.Generations of people (I suggest lower socio-economic) through lack of education (at school, home and socially), lack of experience and, quite significantly, a lack of living, breathing examples in their own lives have no idea that they can make decicions which will lead them into a more prosperous life. Its not just about wanting to help themselves. The big challenge is even knowing that they can.
They dont know that they can inch their way to a life of freedom of choice.Instant gratification is certainly wrapped up in that.
For those who give it a go (saving) or at least not spending, if their life has been one of I want it, I buy it, it is very difficult to keep on track. Any of you cynics ever tried a diet? Still skinny are you? So you see even when we do know whats good for us, we find it difficult to keep going.
On taxes:
Again the fact that we are here on this forum means we have made the decision to improve our financial circumstances. We can bitch all we like about taxes, but we wont get them changed. I hope that by going to these forums, and seeking out like minded investors, I will learn ways to minimise tax today because I dont plan on drawing on it in 20 years time as a pension.
I could go on, but my 10 hour a week job, which is playing a small but steady part in my time and financial freedom plan, beckons.
To go back to real estate investing, I am yet to sign on the dotted line. I’m reading heaps, asking questions of the very few people ( well none really) in my life who have any idea of what Im talking about. I grill anyone I meet who uses the word investment, or real estate or Kiyosaki, Somers, Mcknight, cash flow, gearing etc etc. ( A little hazardous though as I nearly got a long lesson on how to re-build a gear box!!)I do hope to visit this site and others many more times as I have barely skimmed the surface of information available here. I have so many question to ask and so many more things to learn about before I can even devise more questions TO ask. Hope that makes sense!
Cheers
freedom seekerWell everyone!
What a successful topic, it has struck huge debates from alot of different areas, oh well, i think what Dino said was quite true, and i mean, income tax is the way it is in Australia, and if the government keeps getting these cash surpluses we will see the brackets upped again as they did this year,
but as for a flat rate for tax it will never happen, so i think everyone needs to stop worrying about it and get on with life, most of us are very lucky financially and are very lucky to be living in the best country in the world, Australia!
Well, my time is up, my 1 hour lunch break is over for the day, back to managing at the supermarket, hope we get the load finished not too late tonight, lol.
Fudge111[:0)][
][8D]Well .. nothing surer than death, taxes, politics and healthy debate.
Dino .. again a good balanced argument mate. I like how you always come in after everyone has had their say and then summarise your points. We won’t always agree, but I respect your deliberation. Well said.
Cooper .. welcome to the discussion. This is not a “bitch about taxes”. I asked a question for us to compare the doubling of the tax free threshold, followed by a flat rate of tax to see how we might achieve greater equity for all taxpayers. It’s called “thinking outside of the square”.
I take you to task on your interpretation presumably of my argument on the inequity of Child Support. Apart from anecdotal reference it appears that I am the only one in this thread who has openly declared that I pay maintenance. Please read my words – “No parent would (hopefully) begrudge their child of support”. The ATO system calculates the payment. God only knows which commitee of divorcees calculated the formula. An embittered, non-communicative ex will not say no to the money. However, gross income minus about $11K, the balance then multiplied by 18% for the first child, will give you an idea. This leaves about 32c in the pocket for every extra dollar earned by anyone in the highest marginal tax rate.
That’s why Fatboy (a well respected contributor to this forum) questions overtime, even before those of us paying Child Maintenance. Another post asks us why we choose to invest. My answer: “To leverage lost time and leave something for my daughter”.
Positive cash flow in the short term for me is therefore not the smartest option. But I’m still learning and looking at a balance between that and capital growth.
In an attempt to build assets for me now and my daughter later, the Child Maintenance system is accepted as a short term cost due to circumstance, yet a hinderance to long term planning. Don’t get me wrong, I accept the responsibility, but at near $1000 a month, it certainly alters one’s choice of strategies.
I trust that you won’t experience a similar situation. Hey, it’s just discussion .. not a bitch.
Kind regards, Phil
Hi guys,
I wasn’t going to contribute again to this thread, but hey, can’t help myself. I think Phil’s point underscores another of mine, which is that life is not all about choice (ie divorce, maintenance payments etc)… sometimes things get thrust upon you that you can’t do anything about… how you deal with them from there of course, is a different story.
Cheers
rHi again Cooper,
Two more points, then I’ll get off my soapbox.
It’s tax related, so this is the appropriate thread for discussion.
1a/ On a -ve geared IP, the loss is added back to personal income for the purpose of Child Maintenance calculations. Yep 18% again on the loss, payable to the first child. More for extra children of course.
1b/ On a +ve geared IP, the passive income is taxed, then like all other income, another 18% comes out of what is left over after tax for the first child, hence the 32-33c left in your pocket out of every extra dollar earnt.
2/ My lady friend enjoys a fringe benefit from my employment. It’s discounted travel. For every dollar she spends on travel, my obligation is dollar for dollar in Child Maintenance payments, at a given reportable threshold. Fringe benefits received in kind (not cash) and as a result of the job, are demanded in cash by The Child Support Agency. I have loaded my projected income to account for potential travel. If the benefit is not utilised, I will have exceeded my obligation every month. If income is underestimated I am in the shit.
I feel that the system is to protect the custodial parent from the minority of arseholes who choose to go on the dole and avoid obligations with no vision for the future of their own children. The rest of us are the ones who are paying for it.
Off my soapbox now, has your viewpoint changed as yet ?
Kind regards, Phil
Hey Phil, good to see you back, i hope you had a great week away… [
]Child Support is a passion of mine as i am the only unmarried guy in my circle of friends. Unfortunately i have three mates who have felt the wrath of an ex in relation to child support and i have seen just how screwed over a guy can be…
Maybe that’s why i’m over 30 i’m still single huh ?? [
]Fudge: Mate as i said earlier healthy debate is always good and i try to respect everyones’ point of view…
Well apparently i am a naive 20 year old that knows nothing about the real world. Oh well, we’ll just have to wait and see how it all pans out for Broz and I, lol.I don’t think anyone is saying you are naive, it’s more a case of perhaps unless you have seen things first hand it’s difficult to understand the implications… That’s not a shot at you, i think maybe you should take of the rose coloured glasses from time to time though… [
]
On dads (and occasionally mums) being slugged or slapped with or however you wish to term child support, how about a shift in attidtude here. There is no doubt payments can seem inequitable. I dont wish to be drawn into a 3 page debate on that, I simply have this comment. Imagine looking your children in the eye and telling them with the same “passion” as you tell other people that you are being “slugged” with a payment for their existance? Can you picture the devastation in their eyes?Absolutely, and a great point you make. Now imagine the look on the beneficiarys’ face (the ex wife) if payments were made to a trust fund for the child ?? Bet she would be horrified too.
You can’t tell me that the $780 a fortnight my mate pays goes all on his kids ?? []
That’s why i resent the system – the harder he works, the more he gets punished…Sorry for the rant people, i’m on a bit of a mission here huh ?? [
]Cheers,
Paul…“I want to be rich, and stupidly happy – so far i’ve only managed to achieve the stupid part…”
Hi Paul,
Thanks mate, Victoria was good, chasing cows, installing irrigatiion for trees and did a spot of spotlighting, but no bunnies in sight to skin that night.
Re the Child Maintenance (I promise to shut up soon .. promise). I have seen it put beer in the fridge for the ex’s new boyfriend while kids go around barefoot. No, not my daughter, her mother is excellent in care, but I have seen it first hand with mates.
One even argued schoolfees, referring to the total cost when the new boyfriend’s child lived under the same roof as my mate’s kids.
OK, I’ll put a sock in it. Seeya, Phil
Glad we’ve moved from anger about the lazy, stupid poor to “the ex”- now I can relax [
]kay henry
Hi Kay,
Laughing here. Yep, sounds like Days of Our Lives. I get your point. All that from a topic about taxes.
Kind regards, Phil
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