April magazine

COVER STORY

HOW TO GET RICH ON ANY WAGE

We all dream about getting rich, but more often than not, we think of it as being unachievable – something best left to those who earn the big dollars. But realistically, there’s no reason why those on an average wage of $54,100 a year (after tax) can’t aim high. The key is to start investing your savings. You can start your journey to riches by putting away as little as $100 a week. And if you’re really good with budgeting, we’ll tell you how to turn a $400 a week saving habit into an $11,000 monthly stream. And just for a little inspiration, the Money team have tracked down some case studies to prove that if you put your mind and money to it, you can indeed get rich on any wage.

GREENSAVER

Waste not, want not

Story Susan Hely

People I know fall into two groups – those that compost and those that don’t. A friend shudders at the word compost as she can’t stomach the mess. While I’m not crazy about opening the lids on my worm farms and compost bins, I love the efficiency of organic waste broken down to rich fertiliser that is free for my garden. Susan Hely explores the world of composting.

IN YOUR INTEREST

Paul Clitheroe applauds those who regularly give something back to their community

Story Paul Clitheroe

Paul grew up in Griffith in the Riverina area of NSW, so last month he watched the rising level of the Murrumbidgee with a mixture of amazement and concern. The Murrumbidgee does not flow through Griffith as it does with Wagga Wagga. The closest it gets to Griffith is some 30 kilometres away at Darlington Point. Even so, Griffith-area wineries were hit and residents evacuated. Australians have always been good in times of need; in fact, it’s often when we are at our best. Paul takes a look at the generosity Australians show in times of trouble, both monetarily and in time.

How can we make our investment work?

Story Paul Clitheroe

Brendan and Jaki have an investment property in Brisbane which the bough for $352,500 and it is worth around $360,000. Our payments on the property are $2700 a month, while we rent a house for $440 a week. We are really struggling at the moment in terms of cash flow and don’t know if it’s worth the struggle. How we can make this work? Is it beneficial to have the investment? Paul delivers his verdict.

Beware the traps

Story Emi Berry

You’ve probably heard the stories or even experienced it first-hand. You’ve purchased a voucher from one of the online group buying companies, otherwise known as a “daily deal” website. You go to redeem your voucher and it all turns pear shaped from there. Currently, Australians are grabbing an average 1 million vouchers each month, with the group buying market expected to grow an additional 30% in 2012. But with increased popularity has come a wave of complaints from consumers. The five of the top 10 companies complained by NSW consumers to Fair Trading are group buying operations. In 2011, the ACCC received more than 4000 complaints! Money investigates your rights when a deal turns sour.

The itch to switch

Story Nicola Field

When we saw the big banks up their rates in February, mortgagors were not feeling the love, to say the least. While it’s tempting to walk away and find a better deal, it’s important to weigh up the cost of refinancing, but you could save $2800 annually in loan repayments. And there are other ways of saving. For instance, consider switching credit cards. This alone could save you $310. Switching to an everyday account that waives monthly fees will also save you money. With only one in 10 Australians switching accounts in the past three years, the banks are still rubbing their hands. It will take a little time and effort to change products, but remember, it all adds up.

Rethink your strategy?

Story Susan Hely

While many investors offload shares and turn to cash and fixed interest until the share market improves, they seem to be forgetting about the fantastic income available from share dividends. Yes, the share price might be down, but there are plenty of blue chip companies paying high dividends such as Telstra - on track to hold its dividend at 12% for 2012-13. Australian investors also have the luxury of accessing some of the highest dividends on offer in the world. So perhaps a dividend strategy actually makes sense when there is uncertainty. Money takes a look the companies paying out above average dividends.

Our love affair with bonds could end in tears too, warns Ross Greenwood

Story Ross Greenwood

As we know, since 2007 the sharemarket has been a treacherous place to be, with little certainty for capital growth and, of late, no greater certainty about dividends. So if people are more risk-averse, where do they turn? The natural place is the bond market – especially if you have a view that interest rates are going to turn. Ross discusses why we have turned to bonds and the risks associated with them.

Interview with Simon Longstaff

Story Deborah Light

Deborah Light talks to Philosopher Simon Longstaff, the Inaugural executive director of the St James Ethics Centre, an independent not-for-profit organisation. Longstaff hopes that Australia can turn itself into ‘a great democracy’.

The parts that make a whole

Story Chris Walker

In general, “sector” means a part or a segment of a larger thing. While the general meaning is the same when talking about shares, it’s more specific meaning needs spelling out for investors. Chris explains.

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