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  1. #31
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    Pindar 'O my soul, do not aspire to immortal life,but exhaust the limits of the possible.'

  2. #32
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    Quote Originally Posted by huxley View Post
    Pindar — 'O my soul, do not aspire to immortal life,but exhaust the limits of the possible.'
    Nice quote. There is little point focusing your life on accumulating a swag of money to "retire" on. But it is worth doing the hard yards early on to gain a measure of independence. Whatever your measure of independence is. Set that as a goal and once you get there, your focus can change.

  3. #33
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    Quote Originally Posted by huxley View Post
    You just need **** you money! ...
    Actually that is why I started investing in the first place. Had a good job but a bad boss, but was locked into the job. Solo parent, no child support, hefty mortgage. Decided never again, so made a financial plan where I could walk out the door if I chose to. Took quite a few years. Never needed to do it, but a huge relief to know I could.

  4. #34
    percy
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    Quote Originally Posted by Bjauck View Post
    My parents were frugal and have saved to the extent they had a good modest home with a moderate amount of investments. However one of them has a medical condition and now needs nursing home care. Because of their savings they exceed threshhold levels and they do not get a subsidy.

    The comfortable retirement is in jeopardy, as an extra $50,000 pa is needed to cover fees. That would be equivalent to $75,000 before tax income! The costs of living for the independent parent has not reduced by much. There is a bit of regret, that they were not a bit more extravagant. Maybe they could have put in new kitchens and bathrooms and stayed in expensive hotels. Their investment savings will go down quickly with their extra expense. They pay for the nursing home (* all people are subsidised as to the medical component) , whilst some, if not the large majority of the fellow residents, do not. Is that fair? Does it encourage people to save for their retirement?
    Life unfortunately is never fair.
    My wife's mother is in a nursing home with dementia.She worked as a machinist all her life.No family trust, means her house will have to be sold in the not too distant future, to pay for her care as her investment money is nearly gone.
    We are now "comfortable " [well positioned] and the rainy day funds we have on deposit, which matures in May,are going to pay off the daughter's mortgage.The amount of interest, after tax, we have been receiving we can do without.

  5. #35
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    I'm 26. Currently earn around 40k after tax from employment. Of that, I save approximately half. So I could "survive" on 20k from investment income.

    Using a very basic 4% return on investment, I would need 500k of capital invested.

    However, even if I was super wealthy, I would continue to work in some way or form as I feel it is good for a variety of reasons. Sitting at home or on a beach has never interested me. I enjoy outdoors and things, but couldn't do it non stop. I like the social aspect of work too.

    I keenly follow MMM (Mr Money Moustache) and think his website and forum is fantastic. I actually did an exercise after reading all 200+ odd of his blog posts and asked myself the question "If I had $10 million what would I do differently?" The only ONLY! thing I would change would be I'd do an overseas trip once a year and work 25-30 hours a week instead of 40-45. I wouldn't buy a new car, bigger house, boat, clothes, etc. I'm perfectly happy with the material possessions that I own and what I do in my spare time.

  6. #36
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    Quote Originally Posted by Buffett Jr View Post
    I'm 26 .....................
    "If I had $10 million what would I do differently?" The only ONLY! thing I would change would be I'd do an overseas trip once a year and work 25-30 hours a week instead of 40-45. I wouldn't buy a new car, bigger house, boat, clothes, etc. I'm perfectly happy with the material possessions that I own and what I do in my spare time.
    With $10M and you'll just be doing overseas trip once a year and still work? Mate, that's really cutting it to the bone and no respect on what money can give you

  7. #37
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    Quote Originally Posted by percy View Post
    Life unfortunately is never fair.
    My wife's mother is in a nursing home with dementia.She worked as a machinist all her life.No family trust, means her house will have to be sold in the not too distant future, to pay for her care as her investment money is nearly gone.
    We are now "comfortable " [well positioned] and the rainy day funds we have on deposit, which matures in May,are going to pay off the daughter's mortgage.The amount of interest, after tax, we have been receiving we can do without.
    My stars!, Percy always doing the right thing. 66 (Happy Birthday!!!) still 30 years of investing left to make another million or two. Ha!
    I like lots of stuff on this thread particularly Rogers examples. I think there is lots of scaremongering going on about how much money we need to retire despite the fact that most of us will retire healthy and remain in our own homes.
    Perhaps not having a retirement plan is a mistake but I am just not sure how you control the outcome of a fixed capital or income retirement goal.
    I can only hope I can keep saving, minimise risk, and continue buying good companies and investments until that pay cheque stops.
    h2

  8. #38
    Membaa
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    Quote Originally Posted by percy View Post
    ... My wife's mother is in a nursing home with dementia.She worked as a machinist all her life.No family trust, means her house will have to be sold in the not too distant future, to pay for her care as her investment money is nearly gone. ...
    percy, does your wife's mother not qualify for the residential care subsidy? Her house is not included in the assets test. http://www.workandincome.govt.nz/ind...e-subsidy.html

  9. #39
    percy
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    Quote Originally Posted by Baa_Baa View Post
    percy, does your wife's mother not qualify for the residential care subsidy? Her house is not included in the assets test. http://www.workandincome.govt.nz/ind...e-subsidy.html
    Thanks for the link.

  10. #40
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    Quote Originally Posted by Baa_Baa View Post
    percy, does your wife's mother not qualify for the residential care subsidy? Her house is not included in the assets test. http://www.workandincome.govt.nz/ind...e-subsidy.html
    I think you will find that if the person in care doesn't have a spouse living at the family home then the home is included in the total assets. The options are to then sell the home or apply for a residential care loan against the property.

  11. #41
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    Quote Originally Posted by percy View Post
    Life unfortunately is never fair.
    My wife's mother is in a nursing home with dementia.She worked as a machinist all her life.No family trust, means her house will have to be sold in the not too distant future, to pay for her care as her investment money is nearly gone.
    We are now "comfortable " [well positioned] and the rainy day funds we have on deposit, which matures in May,are going to pay off the daughter's mortgage.The amount of interest, after tax, we have been receiving we can do without.
    Life is not fair. However that is not a reason not to action over situations which we/government have a measure of influence and can try to make fairer. Also, when the government is trying to encourage people to save for their retirement, they could increase the incentives...

    But then again, with many wealthy people who have their assets in long-established trusts, there have been few avenues for them to recoup long-term residential costs. Hence the increasingly tough trust "look-through" provisions in many areas, ranging from social welfare to matrimonial property (I think). Tougher look-throughs in a wide range of situations would tend to negate many benefits of trusts. It also raises the question as to why should family trusts enable some people to be able to circumvent government tax and social policy anyway? Trust law and retention of benefit from settled assets by the settlor needs to be examined, IMO. NZ has liberal trust laws which allow settlors to retain control over, use and benefit from assets settled on trust.
    Last edited by Bjauck; 27-04-2015 at 08:21 AM.

  12. #42
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    Quote Originally Posted by Bjauck View Post
    Life is not fair. However that is not a reason not to action over situations which we/government have a measure of influence and can try to make fairer. Also, when the government is trying to encourage people to save for their retirement, they could increase the incentives...
    Kiwisaver has some pretty damn good incentives.... I just checked my balance the other day. My personal contributions amount to $13,568.44 and yet my total balance amounts to $40,407. I would call that a very good incentive!

  13. #43
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    Quote Originally Posted by Bjauck View Post
    It also raises the question as to why should family trusts enable some people to be able to circumvent government tax and social policy anyway? Trust law and retention of benefit from settled assets by the settlor needs to be examined, IMO. NZ has liberal trust laws which allow settlors to retain control over, use and benefit from assets settled on trust.
    Why have discretionary family trusts at all. Companies are available to separate risky business ventures from the family home for the entrepreneur. Incorporated Societies would provide protection for people running charitable organisations. Why do we even need this extra layer of complication, especially as it has often been used to negate personal guarantees, receive government benefits when you might not have otherwise been entitled and also reduce tax and ACC premiums.
    Yes all the benefits listed are great if you are receiving them but it makes society as a whole a bit un-fairer for no real benefit.
    Last edited by Aaron; 27-04-2015 at 09:11 AM.

  14. #44
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    Quote Originally Posted by Winston001 View Post
    Very nicely illustrated Roger: my compliments.

    I have spent years pondering the Great Wall of retirement and attended seminars, read books, and saved what I could.

    I have also advised families and dealt with the parents estates when they have died.

    My conclusion is that saving "enough" to provide a truly independent income is impossible for most people. Including myself. In fact I now regret not taking family holidays to Australia, Europe etc as my friends did.

    We can't live life in the future: life is now. As in all things, moderation is the key. Save for retirement but don't let it worry you. Rich relationships with family and friends are the investment which brings rewards over your whole lifetime.
    Allow me to return the compliment, I really like the bit highlighted.
    Some good posts here. Thanks for so many good contributions and its turned into quite an interesting thread.

    I think we can all agree its a very good idea as an absolute minimum to have a debt free home by the time you retire. I also think its a good idea to have at the minimum some other asset that pays a regular income whether that's an investment portfolio, rental property, part of your existing home converted to a flat or some other reliable form of income as its a fairly modest lifestyle just existing on the national Superannuation alone even with a debt free home.

    I'd like to take up the debate about Trusts.

    Trust law is long established and I would perhaps somewhat boldly suggest most of our politicians have their family home in a family trust.
    At present my understanding with rest home and in home care costs is they're looking back 10 years for gifting, used to be 5 AND they look through family trust structures in regard to regular income payments from same, I don't think they did this several years ago.

    Now for some pure speculation.

    Will that look back period increase or will they look through the family trust structure completely ?

    I doubt there's the political will for the latter option but I could well be wrong but there's the distinct possibility that they'll look back further in an effort to stem the rising health care costs in this area.
    In my view this underscores the importance of establishing your family trust early and getting the gifting done and dusted, (this process is helped by the recent abolition of gift duty so you can now gift it all in one step provided you're solvent and the Trust is too).

    Will we see the re-introduction of some form of national superannuation surtax ?

    In Australia I believe if an individual earns more than $72,000 they're ineligible for Super.
    I suspect with the baby boomer population tsunami we'll see some sort of similar system here eventually and / or possibly an increase in the eligibility age from 65 ?
    Whether this is in tandem with new look through trust provisions who could possibly know ? but I think it doesn't do your lifestyle any harm by having your assets in a family trust.

    I'd rather not get into a social debate about whether its morally right that some sectors of the population gain an advantage through trusts, (real can of worms that one). I'd prefer to examine how the law works today and suggest some possible extrapolations based on logic and trends.
    Last edited by Beagle; 27-04-2015 at 12:39 PM.

  15. #45
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    Aaron - a trust is easier than a prenup. Other than that, I am coming around to the line of thinking that they ain't worth it. However, the fact banks require a personal guarantee for pretty much everything which means the benefit of a limited liability company is diminished (for secured/band creditors anyway).

    There are now pretty comprehensive look through re working for families do I expect this to be rolled out for all govt benefits.

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