Everybody wants to pick a share-price winner, and there is no shortage of information. There is a plethora of investment newsletters, stockbrokers always have recommendations and the papers feature share buys and sells continually.
I don't fancy myself as a stock picker, which is why over 95 per cent of my portfolio is in managed funds. However, the successes I have had were based on observation. I got into Magellan at $1 a share way back in 2010 when I noticed that every time they ran a session for advisers, there would be double the numbers of advisers present versus the previous time. The six-monthly dividends now from that purchase are more than the original investment.
Then there was Iress, which I bought for $4 a share about 15 years ago. I knew that the 'Holy Grail' of the financial planning industry was software and also knew that every piece of software I had been shown was a dud. Then suddenly Xplan appeared and it was a winner. Iress was behind Xplan.
A friend told me recently how he made a nice chunk of money as a result of taking his granddaughter to a morning tea. She told him they had to go to Smiggle to buy some merchandise that was in hot demand by young people. He had never heard of Smiggle but when they arrived, he was astounded to see the long queues of people outside their store. He bought a parcel of shares in Premier Investments which have appreciated rapidly in just seven months.
But there is also the opposite. You can dump a share because your dealings with the company are so bad you wonder why they are still are in existence. And this is how I came to sell my Telstra shares an hour before I wrote this.
We have persevered with Telstra for many years despite the difficulty of communicating with them. Earlier this year, when the NBN became available in our area, Telstra rang us continually to convince us to remain with them by switching our Telstra cable internet service to Telstra NBN. We declined and moved the home service to Aussie Broadband.
The Telstra service was discontinued and the associated landline number ported over to a new provider. The problem was that Telstra kept sending us bills telling us that the direct debit to our account would continue.
I rang Telstra where a recorded message told me to use the MyTelstra app on my phone. That was a disaster. Naturally they start the conversation by asking for my full name, date of birth and account number which I duly provided. The next message advised me I was on a contract and there were termination fees. When I asked for a copy of said contract and what the termination fees were for, there was no reply.
What followed was a nightmare. Every time I re-joined the message conversation the cycle re-started with the usual request for name, date of birth etc and what was I calling about. After having provided the details more than six times, I finally gave up and made my first ever complaint to the Telecommunications Industry Ombudsman. It took three minutes online.
In less than 24 hours after I lodged the official complaint, Telstra had emailed me an apology and promised to refund all the disputed charges. I then tweeted what had happened and within five minutes, Telstra tweeted another apology. Unfortunately, that was not the end of it, Telstra continued to debit my account. So once again I made an official complaint to the ombudsman, he quickly replied it had been escalated.
Next day I received a phone call from a very pleasant woman at Telstra in Melbourne. She apologised once again - and said that the money would be refunded within five days provided "they got approval from their superiors in the Philippines"! And this is supposed to be an Australian company.
The lesson is obvious - don't spend weeks fighting with your telecommunications provider. Use Twitter or go straight to the ombudsman. Through either action you'll get your fast results.
Noel answers your money questions
I have just turned 64, have $350,000 in super and hope to retire in three years. I have never salary sacrificed but am keen to learn more about it. I earn $100,000 a year.
My employer contributes $9500 a year - is it possible for me to contribute the difference between the concessional cap and my employer contribution. Can I use catch-up contributions to make that the difference for the last five years. Should I do this by salary sacrifice or by personal contributions?
The limit for concessional contributions is $25,000 a year but this will rise to $27,500 after June 30. This limit includes employer contributions - so your maximum salary sacrifice for personal deductible contribution would be the concessional cap less what the employer pays during the year.
For this year this would be $15,500 if the $9,500 is what is paid into the fund this year. It is always a good idea to check that it is actually paid to the fund and when it is paid. Bear in mind concessional contributions lose 15 per cent in contributions tax within the fund.
Provided your superannuation balance was under $500,000 last June 30 you are allowed to make catch-up contributions for the financial year that ended June 30, 2019 and onwards. Talk to your fund they usually are keen to have you make extra contributions and, if your finances allow, a personal contribution can be a great way to make a contribution in June. This can be as tax effective as salary sacrifice. Take advice - it's important to do this properly.
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My father died in 1979. My brother and I decided to hold inherited shares as "joint tenants", which meant that if either of us died their share passed automatically to the other. My brother recently died and I am worrying if I sell the inherited shares will they be subject to CGT and if so will it be calculated as at his date of death or the date the shares are transferred to me?
These shares are pre CGT assets to both you and your brother. But as your brother died after September 19, 1985 the half you inherit from him will now be subject to CGT. The cost base of that half will be the market value at the date of your brother's death. If you sell them now half of the gain (on your half) will be tax free but the other half will be taxed on the difference between their market value when your brother died and the selling price.
Can a single-aged pensioner who has bought into a residential park or retirement village get rent assistance? Both income and assets are below the threshold to receive the full pension.
The short answer is yes, but it will depend on the contract. In a retirement village your contract is normally just a lease over the land and buildings. Centrelink will often refer to this as your entry contribution.
If your entry contribution is less than $214,500 then you can qualify for rent assistance. In a land lease community your contract is normally made up of two contracts, the lease over the land and the purchase of the building.
Under these contracts you are normally eligible for rent assistance irrespective of whether the amount you pay for your home is more or less than $214,500.
- Noel Whittaker is the author of Retirement Made Simple and numerous other books on personal finance. Send your questions to firstname.lastname@example.org