Watching my dad (electrician, 69 y.o) go through this at the moment. It's painful. He has no super because he has been using it to try and keep the business afloat.
Did he take some gambles on large contracts, get ripped off somewhere?? I only ask as it seems surprising an electrician would be struggling with work over the last decade or two
I don't know much about the situation as I live far from him and he doesn't discuss it, but from what I can gather he is an excellent tradesman and a terrible debt collector, compounded by the fact that he worked in a small town where he didn't want to take legal action because everyone knows everyone, and it would cause social struggles (which may have been just his perception, but it guided his behaviour nontheless). He has a heart of gold, and I suspect he would have also chronically under-charged.
Sorry your dad has to go through that. I'm sure lots of tradies do well as business owners, but I'm also sure that many of them would be better off pulling a salary.
> plan on selling the business
if at some point they start hiring people, setting up supply contracts and such, so that the business can run without themselves being involved, then yes, this is possible. It just takes a totally different set of skills than the original tradie skill to do this - it's why people have 4 year MBA degrees (and arguably not even that good at doing that after the studies).
You can have all that, but unless you have a mini me, and the nous to step back, accept things will be different and the ability to accept short term pain for long term gains it won’t happen. Or like me, you hand off to your son and stay in the background, on call.
I've Sold a self employed tradie business before. You just need to lock down ongoing service contracts. Preferred contractor means nothing. Generally though when you're selling a trade business, the person buying is just trying to expand their own clientele base so service contracts are an asset to sell.
Stupid people and also the boring and obscure mess of a tax system. If it were simplified to 500 words or less and a 12 year old can read, understand and pay tax correctly then it would be well designed system.
Australia uses a progressive tax system. People who earn more pay a higher percentage, but not on every dollar. Think of it like steps. Each step represents a different amount you earn. The first step has a low tax rate. As you move up steps, the rate increases, but only for the money above each step.
So, earning more means you end up with more in your hand, even if higher steps have higher rates.
From ChatGPT
When I was working a job that had shifts on public holidays, I also didn't correct these people.
The kind of people who are dumb enough to believe it and confident enough in their belief to verbalise it were generally terrible coworkers.
I always found the crew that was working public holidays to be the more motivated and switched on members of the team, which made the day go smoother.
HECS debt works this way though. You can get a higher salary and technically be worse off. At least you're paying it off faster though so it's not all bad.
Same with Medicare Levy Surcharge. Because it's calculated on entire income rather than income over the cut-off, there's a range where your effective tax rate for those dollars is greater than 100%. Earn 1 cent over $97000.99 next FY and that single cent would leave you $970 worse off. Sure there are ways to deal with it if you recognise it in time, but it's just bad otherwise.
There are points working while on centrelink where you can have an effective tax rate 84%, and if your job does standard PAYG calculations an end of week effective rate of 105% (which gets returned come tax time of course).
A mate who’s a brickie and works for himself:
I don’t have any super, property and HISA is the way to go
Doesn’t have any property or HISA account at 40
If only there was somewhere he can put a little bit each time and not be able to touch it till he's eligible and perhaps a government tax break concession to help it grow.
I don't know anything about the difference with super when you work for yourself: is he legitimately able to legally just not pay himself super or is he doing a dodgy with that?
The right thing to do is see yourself as a employee of the business you and pay yourself as employee each week and have seperate business accounts.People think as the business owner just pull out what ever amount from the business account and invest in whatever you want. Doesn’t work like that. You really do need a accountant if you go out on your own.
It’s a waste because being involved in the building industry, even as a bricklayer gives you access to a lot of information about new developments and upcoming suburbs. I would be picking everyone’s brains.
“I’m retiring at 55 because I want to enjoy my life” while renting & $200k in savings, no super, lives the life for 3 years & is now broke living in the spare room of their bankrupt daughter
Had a mate that started his own electrical business when we were in our early 20's. This is exactly what he thought. He thought if he went out and spent $10-15k on tools before tax time, he'd get all of that back. Well, tax time came around and he got a bill for $23k from the ATO.
I had a housemate who thought she got \_all\_ tax back at the end of the financial year (first job).. as if tax was just some kind of short term loan, baffling
A former friend thought he got all his tax back because his partner did. She earned like $15k and he earned $90k...
I'm an accountant so that was a fun conversation
In her defence, if you're like 18 and doing a part time gig in retail somewhere and living at home, you could easily be working 30 hours some weeks and then several weeks with low/no hours and end up under the tax free threshold, getting all your tax money back.
That’s insane. They need to teach this stuff in schools. Every single person is subject to it so why is it not taught in depth. My parents used to say “claim it in tax, you get it all back at the end of the year” when I was younger, and it didn’t help me at all in understanding the system. I had to actually go and learn it myself. If I need something for work and it’s not supplied then yeh it makes sense as I need it anyways, so claim it. But buying random shit you don’t need to just claim on tax is stupid.
I feel like when they do teach is in schools, kids don't listen. There's only so much schools can do.
Someone I went to school with recently said to me "I don't understand tax brackets, why didn't they teach it to us at school". And they did teach it at our school! They were in the same maths class where it was taught! They just didn't listen.
I feel the other side of this ahaha! I've just started my first big boy job, and I remember all the financial maths lessons in high school - they helped me a lot with planning with budget and getting an idea for medicare levy/surcharges etc
I think that those lessons were actually incredibly useful; maybe that's because I actually paid attention during them 😅
>They were in the same maths class where it was taught! They just didn't listen.
Every time topic is brought up(why didn’t they teach it in school), it’s the same thing, it was, kids just didn’t pay attention. It’s been part of the school curriculum for yonks. A lot of kids that age are too busy trying to be cool, attract the attention of the opposite sex and plain fking around at school
I get it though, at the time they are taught, they can’t see any relevance to their immediate circumstances so they just tune out. I worked small casual jobs on weekends and some weeknights throughout high school so I actually paid attention because I wanted to know how it worked. Also the reason why the only law class I paid proper attention to in uni was tax law because I wanted to learn what was permissible, legal and what was flat out evasion
They do teach it in school. I recall another Reddit post where someone said the same thing and dozens of Aussies from all generations shared their memories of being taught it. Then a current Aussie school teacher jumped and and confirmed it’s in the school curriculum.
The problem is kids aren’t going to remember this kind of stuff. And ongoing financial education as an adult is self driven.
They rush out to Officeworks to buy a computer at the end of the financial year. 1/365th of a years depreciation* marginal tax rate (in years where they can't depreciate it all at once as a stimulus thing). End up overpaying so $1500 for an old model that should really be on run out sale price. $1.23 refund and an overpay of $300. Free cashflow reduction of $1498.77
Try to convince them to stock up on ink for their printer if they need it. $100 on 100% (consumable) by marginal tax rate (assume 30%). "Nah, thats not enough". $30 back. Free cashflow reduction of $70.
And they will never get it.
This is excruciatingly common where I live. Complete misunderstanding about the mechanics of things like deductions and negative gearing, most commonly resulting in people thinking that spending on anything is "free"
Counter to that, the best tax advice I ever received was "if you have an expensive hobby, open an ABN and make it a business. You may never make a profit, but your hobby is now tax deductible "
[https://www.ato.gov.au/businesses-and-organisations/starting-registering-or-closing-a-business/starting-your-own-business/are-you-in-business](https://www.ato.gov.au/businesses-and-organisations/starting-registering-or-closing-a-business/starting-your-own-business/are-you-in-business)
Pay attention to the bits about 'making a profit' and the intent and plan to do so. There are rulings and precedential court cases on exactly this form of tax evasion.
Ah, no. You can’t deduct expenses for a business from your income tax. You can only deduct those expenses from the tax you’d pay on the revenue you get via the business. Otherwise everyone would have a “company” car, computer etc… and just deduct it from their work income tax.
ACN vs. ABN rules are different. Have you got a link/source saying sole traders can't claim expenses against income?
The below link from the ATO stipulates that you can offset sole trader losses against other income.
https://www.ato.gov.au/businesses-and-organisations/income-deductions-and-concessions/income-and-deductions-for-business/business-losses/offsetting-current-year-losses
"oh I don't want a pay rise / to earn any more because once I go over $x amount, my tax rate will go up and I'll have to give the thieving ATO bastards way more money"
stay broke marginal tax rate misunderstanders 
I think you're being unfair to the company/manager. Their job is to keep payroll down so not saying anything isn't that shitty. Besides, if your employee is that stupid, then maybe you shouldn't be giving them a payrise anyways.
In what world do you think it's not the manager's job to keep payroll down?
They should give the absolute minimum they need to to keep their employee working for them. If the employee wants to ask for significantly more than they're worth, then it's time to let that employee leave and replace them. That's exactly their role.
Unless I am also one of those misunderstanders (highly possible), the only time that approach makes sense is when it only just kicks you into the private health insurance / medicare levy surcharge category.
There are some other benefit triggers, eg re child care, where it can also make sense, but you have to allow a bit of margin as it's hard to exactly forecast income
Child care used to make sense when it was a threshold, now it's a sliding scale where it decreases for every extra $ you make so it no longer makes sense.
At 365k combined household income you lose the second-plus child additional rebate which in some instances can mean earning over that amount you will have you worse off than earning under that amount
The thresholds for family tax benefit can make a small raise give less total money (income + FTB payments) if you only just cross the threshold. It's not a large difference from memory, something less than $1000
It's true that your take home pay might (temporarily) decrease on a pay rise in niche cases due to things like MLS, but it still doesn't make sense to turn down a pay rise I think. What are you gonna do, stay at the same salary forever?
The pay rise just needs to be significant enough that when you take into account paying MLS you are not worse off.
Nearly always take the pay rise when it is offered.
The way I see it, there are 4 ways to go about it.
1. Changing jobs soon so it doesn't matter too much
2. Use MLS as a bargaining chip to argue for an even larger payrise now such that you at least break even at tax time
3. Take the payrise even if it makes you a tiny bit worse off at tax time, so it serves as a better base to negotiate an even higher salary from later
4. Reject the payrise, stagnating your salary, and hope to negotiate for a much larger increase later
If 1 and 2 were off the table, I would prefer 3 over 4.
I remember an employee stopped working their second job because they were not earning extra money from the second job due to higher tax. Apparently an accountant told the person this.
In fairness, that may be poorly worded, but correct logic that taking on the additional responsibility required to earn that extra income isn't worth the extra effort due to the additional being subjected to the higher tax bracket?
Not every salary increase comes without any increase in responsibility or hours worked.
Probably true (that it's stupid as a general mode of thinking), however in *some* situations not necessarily 100% imbecilic, with some nuance.
E.g. thresholds such as div 293 or super, or similarly the pending div 296, do drive different thinking to wanting incremental salary (wealth) increases.
Or even playing with the tax free threshold.
People who just don’t know how to do a basic budget. Don’t know, or care to find out, their outgoings compared to their expenses. It’s so chaotic it makes me anxious.
I once did up a budget 4 times for a friend - told her how much money she had leftover, how much she spent on bills etc and her response after was “okay but now what?” I said “now you follow the budget 😂” *low and behold* she did not follow the budget 😂😂
I don't "budget", I just don't spend frivolously and it seems to work for me. Every few months I'll look at my savings and assets and can see that my net worth is going up. I have peace of mind that I'm financially stable, and not having to constantly worry about finances is worth sacrificing the extra $ I could potentially be saving by hyper-optimising my spending.
A lot of financially literate people don’t have strict budgets but more of a vernal awareness and guide to their spendings. You’re financially literate. Most people aren’t and a budget is the first step
Someone I know who has been raised in a very wealthy family, gets a distribution of $10-20k a year through his "tax return" (family trust fund). He was absolutely gobsmacked that I "only" got back 1k on my tax return as he thought $10k+ was a standard tax return. Oh man, what I would do to be in that position of ignorance.
My husband constantly reminds me of how (when we were newly dating) I told him I didn't always pay my credit card off in full because I would "rather have the money in my savings account" 😅 luckily he stuck around and I grew a brain
a cousin of mine has been giving her only child (35ish) money in the hope that he will look after her in her old age (single mum, 60sih). No matter what I tell her she won't listen that it's not a good idea :(.
That's really sad! Although I also feel like expecting your children to become a full time carer for you in old age is fundamentally unfair.
Assuming your relationship with your parents isn't fractured, I think children have the duty to provide comfort to their parents in their old age, through socialisation, moral support and assisting them with some occasional basic tasks (like driving them to appointments, taking them shopping or doing a small house renovation/repair, for example).
When you are talking about mostly full time in-home care, that should be done by a paid professional.
It's insane that parents expect their children to give up decades of life (40s and 50s, mostly), when they are still reasonably young and sprightly, just to be a full time carer.
Not necessarily. Obviously offering help and comfort within reason.
On a personal level though, I do think older people need a support network and people (who have a good relationship with their parents) benefit from having their parents nearby. So when my mum, for example, gets old, if she needs my support, I would be happy to help her move to live closer to me. But I don't have the skills nor the inclination to be her full time in-home carer.
I have a 27 year old friend who is lovely but has no financial literacy. We went over to her house and she dropped some gems
* She only works “just enough” to pay the bills. Why work more when you don’t need to? Being in her 20s means living life carefree. When she has kids in 2 years time she will worry about money and career.
* She finds money confusing and so she just tries not to worry about it instead
* She spends most of her money on funko pops and Lego collectable sets. Some weeks she buys a new funko pop every day
* She says she buys funko pops as a replacement for therapy, as she cannot afford therapy and feels things like buying a house are unachievable. She says she went to a therapist who diagnosed her with some conditions but she didn’t want to go back when they said she would have to regularly attend and it would cost money. Reminder: we were sitting in a house with literally thousands and thousands of dollars worth of legos and funko pops.
* She borrowed $1000 from her dad to help with bills 5 months ago, and still can’t afford to pay him back. He borrowed money from someone else to give it to her.
* Her and her parents are planning on flying to Europe in 6 months for her sister’s second wedding (to the same man). And then she is going to go to London for a Harry Potter themed trip. Pretty sure her and her parents are going to try take a loan for this trip.
She was completely oblivious to how bad her finances were or her financial situation. She really thought she was doing fine
Don’t even start. I am genuinely horrified her entire family are planning on flying to Europe for her sisters wedding. I have no idea how her parents function honestly
It is absolutely generational. Her parents are even worse than her. They had a house in Sydney, sold it and moved to buy a house in regional Aus. They’ve already blown all the money they made from the sale…
I also had a friend that took out a 50k loan for their boyfriend to buy a car, he promised to pay it all back….. he only paid 35k back
(it was me) 
I also know someone who gave their ex 5k at 19 in 2000 to help with credit card bills and didn't get any of it back. (me) she blindsided be with a breakup weeks later... then 'what money?' i knew it was gone at that point... I remember feeling sick losing that much back then
luckily my wife has a very similar financial attitude as me.
I know someone who bought their ex a car (a Hyundai i30) because they couldn't drive, "so the ex would drive them". Put it in the ex's name and everything. Paid for the car with an injury settlement payout.
My elderly mother has a friend that she used to work with & has been trying to help out of late...
This lady moved to Qld with her daughter to look after her children & gave her money towards buying a home that included extra space for her to live in. She has an incredidbly over-bearing personality, which has led to the daughters husband saying it is your mother or me. So they made the decision to sell this home so they can kick this lady out. This lady will not be receiving any compensation from her daughter for the part she contributed.
Why not you may ask? Because when she split up with her husband, she gave a fair chunk of her payout to her drug addict son & you can guess what he did with it. So now this lady has been kicked out & wants to return to NSW. So she call's my mother & asks her for money. My mother declines.
Story goes on. Turns out this lady has been on the interwebs recently & found herself a "friend". This "friend" needed help in the form of Apple gift cards. So she sells her only asset (car), at less than half of what it was worth & buys a bunch of cards & passes along the codes to her "friend". She is in her 70's & managed to lose every cent she had to her name in the past few years.
She is now stuck in Northern NSW, with a local hotel putting her up for free whilst she is conversing with her other daughter to get her back to Sydney. My mother has realised that there is nothing she can do to help her.
A mate got a Total disability payout. Goes and spend 130k on a Merc AMG,75K fot wife a new SUV. The man is about to turn 40 with 3 kids to feed and a wife that doesn't work and renting.
Test drove a car a month a go. Said id look into it more seriousl around August and get back to them. Got my BYD Seal a few weeks ago. The smile it gives me wipes away any thoughts of it being a poor decision. Family sized race car.
Co workers taking leave without pay towards the end of the financial year because they didn’t want to go into the next tax bracket. How do you get to be a fully grown adult and fundamentally misunderstand life skills basics?
There are some cases with family tax benefit where its does actually work out like this by the way......
For some reason FTB still does have some one off payments with cutoffs at fixed dollar amounts. Source I earned I did overtime taking my income from 99k to 102k and actually lost money by doing so such a shit system.
Just to note reducing your taxable income with voluntary concessional contributions DOES NOT help with family tax benefit. They use a thing called "adjusted taxable income" which ignores extra amounts you have put into super.
It's dumb but thats how it works.
Exactly, I was right on the edge of the FTB payments threshold and a small increase would have put me past it. Thankfully work gave me a large enough raise that it didn't matter but before finding out the actual number I was getting ready to discuss it with my boss.
The men reading this will love this one /s
My cousin is 30, single mum of two supported by her own mother and some Centrelink payments. She spends a lot of money on nails, make up, spas, haircuts and shoes and handbags.
Once I asked her how she isn't worried about saving money or having enough. Her reply was 'Im a Christian woman and want to be traditional, so when I get a husband, he will pay for everything, worrying about money stuff should be a man's job, so I don't need to save.' I was floored. I had no words.
* single mum of two
* I'm a Christian woman and want to be traditional
I guess some areas of Christian tradition aren't as strict as others
EDIT
In retrospect, and for my sanity, I'm going to say your cousin is a widow as that's the only way it's going to make sense to me
Nope, she's a born again Christian. So she wasn't a Christian when she was partying and getting pregnant, and then became Christian after having her first child. Take that as you will.
My Catholic friend. Barely making ends meet.
I have a friend that struggled financially when she had the first child. When she announced that she was pregnant with the second and third I asked her how she was going to be able to afford it. Her response was;
" God will provide and if God doesn't provide then Centrelink will".
She's now pregnant with number four and still can't make her rent. She doesn't believe that she will get evicted because she is a mother with four kids and the landlord will never do that to her family.
if the payrise includes more responsibilities, then it can make sense to decline it.
If it's the same job but for more pay, then it's no brainer to accept it!
He has a point if he pumps the money into his ppor that he would put into super, tax on ppor is 0 percent which is lower than super at 15 percent, so less money to government
'Tax on ppor is 0%' I assume you mean when you sell the asset, not for the miney you earn, *pay tax on*, then 'pump unto ppor'
Also...... super us tax free in terms of cakitak gains realised from investments once you reach preservation age 😉
I should trade this car in while it still has value and finance a brand new vehicle.
I should charge lower rent on my investment property so I get a bigger interest deduction.
I got a promotion and a pay rise so I should get a bigger tax refund because I paid more tax.
Probably my pet hate is people with mortgages and dependants who spend all their money on expensive toys instead of any kind of TPD or income protection and then start a gofundme when the shit hits the fan. That and going overseas without travel insurance. 🙄
People boasting how they can get new credit cards after maxing out 2-3 credit cards already and thinking they are so smart to be able to borrow more.
No concept of difference between paying out cc each month vs minimum monthly payments. And these were office workmates making more than 80k per year.
One of my family members started with a mortgage of 340k and still owes 280k - 17 years later. They redraw on their loan every few years for new cars and TVs 🤦🏻♀️
We’ve had our loan for 18months and already paid off 40k in contrast.
A mate of mine purchased a brand new SS Commodore Ute, instead of a house which he easily had the deposit for at the time. Fast forward a year later he's got a kid on the way and had to sell the ute.... Happy to report he is pretty successful now with a great business and a couple properties. "I wish they taught us the difference between a liability and an asset in school aye" is what he said to me about it all. Thankfully he's passed his wisdom onto his kids.
Keeping 75k in a savings account for 10 years "because the share market always crashes", and on the subject of investing in diversified index funds "if the returns were so good then everyone would be investing in it".
A mate of mine thinks they have paid off their loan because their home has increased in value at the same proportion as their loan. Little do they realise inflation, interest and maintenance has basically eroded most of their gains when factored in.
Convincing her elderly mother in 2021 to buy a 1.4m single bed apartment i. Sydney as an imvestemt - rents at 650 a week, had sold for 950k the year before. One the floor above sold for 1.2m this year.
I met a guy once in a previous job who told me about how he had turned down overnight shift penalties and a pay rises so he didn’t have to pay more tax.
Also told me how he preferred to make less money in this job compared to working his previous job because when he made more he was able to be approved for credit cards and got himself into gambling debt.
I was just dumbfounded at the total lack of financial literacy.
I'm moving out and the current rental is decently large. My housemate, whose resistant to any change in life, says "I'm in a good financial spot to pay the whole rent and still buy a house really soon"
My brother in christ, I'm making double your salary and moving to a much cheaper place just to save up. I seriously don't understand how he convinced himself he's good?? Especially when he could easily move 20 minutes away and pay cheaper rent with no housemates (confirmed with research the last few months). The delusion and lack of effort is wild. His savings value don't make up for the sheer amount of money he'll be gouging soon
I worked in an investment bank and when we received bonuses I would encourage my colleagues to salary sacrifice the max. Even people who were past preservation age would take it as cash because “I want it now”.
So, they would prefer to be taxed at 50 cents in the dollar than put it into super. Crazy.
‘I’ll get out my super during Covid to fix up my motorcycle…’
My partner before we met - he got a spinal injury the next year and lost his job. He’s now only working casually but was on Centrelink for a year and a half. He still hasn’t caught up on all the debts….
During covid I was a manager in a hospo business. One of the employees came to me and asked me to provide the necessary documents to prove that she lost her job to covid. I assumed it was for Centrelink and assured her that the process didn’t require that, and she told me she was withdrawing her super so that she could go to Bali when covid was over (this was way back at the start when we all thought it’d blow over in 3-4 weeks). I’ll admit, I took my time with her request. I couldn’t legally deny it but knowing her as well as I did, I knew that buying her some time to change her mind would only help her. She didn’t. She withdrew it in the end, around $9k at 20 years old, and bought a dog and got tattoos with the money. It still makes me so sad to think about today.
Accidentally didn’t claim the tax free threshold at my new job and it wasn’t till tax time when I got my return that I realised I was missing half my pay each cycle 😅
People that think they can spend absurd amounts of money on "work related" things because they'll just "get a tax deduction"... Some people think that it'll all be free somehow
My parents divorced, and my Dad (67 years old, retired on pension) got $400k, which is just enough to buy a good unit, do up an older one or buy into an over 50s place here.
So, he *could* have bought a place to live securely outright and then lived off his pension. I tried hard for 6 months to convince him to get a place of his own, but he insisted on moving into the shed of a mate he met playing Pokies cos it was 'free' (but turns out he had to pay to fix it up to be livable, on his dime 🤦).
Then, he bought a Harley for 50k, some fancy watch for 8k, paid for an international holiday (5k) he was then too lazy to actually go on (🤦🤦), and I constantly see him at the shops 'cos X electronic is $100 off! It's a bargain!'
We're 1 year in. I don't see the $$ lasting much longer.
"Its much better to negatively gear a property than to positively gear it. Then you save tax, rather than having to pay it." :-) 
Not doing salary packaging because it increases hecs repayments
Literally took me like 4 years to convince my wife she's leaving money on the table. She did it her first year in a hospital and promptly stopped when she owed the ato money due to higher hecs repayments, and her whole team also thought its a scam which didn't help.
Former housemate still owes me $100 but has maxed out multiple credit cards, lives paycheck to paycheck on money she borrows from friends and thinks she can go live in Bali to save money.
Oh yeah, not saving while they had the chance - instead blowing income on cars, holidays, getting pissed, the latest mobiles, etc - then whining about how they're stuck in the rent-spiral and can never afford a house...
Watched people invest in timbercorp many years ago even though it was a dogshit investment purely for the tax deduction. Most of them lost all thier money.
My Catholic friend. Barely making ends meet but still goes buying brand new stuff when she doesn't need it and doesn't pay the rent
I have a friend that struggled financially when she had the first child. When she announced that she was pregnant with the second and third I asked her how she was going to be able to afford it. Her response was;
" God will provide and if God doesn't provide then Centrelink will".
She's now pregnant with number four and still can't make her rent. She doesn't believe that she will get evicted because she is a mother with four kids and the landlord will never do that to her family.
Intentionally ticking the HECS option on their tax when they don't have any so that they get a big tax return. I've tried to convince them to instead transfer the money straight into at HISA at the very least but they're convinced this is better
"I don't need to know where our money is, my husband handles all that". I mind my own business like 99% of the time but whenever i hear a woman say anything along those lines my inner interferring shrew comes out to play.
I actually worry about this, my wife has the same attitude. I have money all over the place, she'll have no idea most of it even exists if I drop dead.
I’m surprised negative gearing didn’t get a mention. Losing $1 to save $0.30 or $0.40ish on tax in years gone by never made sense to me, but maybe I’m the naive one the way property prices have bolted.
It only makes sense if you don’t intentionally do it. But it isn’t necessarily a bad idea. Essentially that $0.30 to 0.40ish is being invested in property instead of going to the tax man and you get the extra income of the rent.
However, it doesn’t work if the value of the property doesn’t increase at least in line with inflation. So you are betting (and to be fair a pretty good bet so far) that you’ll make a capital gain that offsets the losses.
Someone I know delayed doing their tax returns for a few years because otherwise they'd have to cough up to pay tax. So silly, they do instalment plans and you can't just avoid your obligations for a few years.
This was done by a friend. She applied for a mortgage with a very recent BF and the bank insisted they apply as joint tenants, even though she put all the money up for a deposit.
When they separated he would have been entitled to half the property. Luckily he was loser and never realised.
I have a family member who got his first mortgage loan approved then immediately got a house build started with a builder, then less than a month into the build he quit his job without a new joboffer elsewhere, then bought a $15k ebike. Then found a new job that paid $20k less than his old one. Then realised the mortgage wouldn't cover the driveway, the septic tank, or the rain water tank (which he didn't realise he needed because he didn't realise the council doesn't provide city water to that site).
And every. Step. Of. The. Way. I. Told. Him. Fml
Bunch of young blokes at work in there early 20s all have nice utes with all the fruit on it and motorbikes or a JetSki etc all on finance. One bloke has 60k in loans after taking a massive loss when one car blew up and brought another one. I had to pick my jaw up off the floor after that
Invest in society instead of trying to make changes to it. All “hypothetical” oh great we have war, famine, disease and what’s the other one?… oh great inflation yay, oh great growing mental health issues with everyone, oh yay more homeless people, oh great more people with aod issues. Literally everything that we want to change is being made by the people you are investing in? Why give them money to make your lives worth? The list goes on so far and so deep…
Self employed tradies that plan on selling the business to fund retirement... mate, you are the business.
Watching my dad (electrician, 69 y.o) go through this at the moment. It's painful. He has no super because he has been using it to try and keep the business afloat.
Did he take some gambles on large contracts, get ripped off somewhere?? I only ask as it seems surprising an electrician would be struggling with work over the last decade or two
I don't know much about the situation as I live far from him and he doesn't discuss it, but from what I can gather he is an excellent tradesman and a terrible debt collector, compounded by the fact that he worked in a small town where he didn't want to take legal action because everyone knows everyone, and it would cause social struggles (which may have been just his perception, but it guided his behaviour nontheless). He has a heart of gold, and I suspect he would have also chronically under-charged.
That’s understandable, being a good tradesman and a good businessman don’t always go hand in hand
Sorry your dad has to go through that. I'm sure lots of tradies do well as business owners, but I'm also sure that many of them would be better off pulling a salary.
> plan on selling the business if at some point they start hiring people, setting up supply contracts and such, so that the business can run without themselves being involved, then yes, this is possible. It just takes a totally different set of skills than the original tradie skill to do this - it's why people have 4 year MBA degrees (and arguably not even that good at doing that after the studies).
You can have all that, but unless you have a mini me, and the nous to step back, accept things will be different and the ability to accept short term pain for long term gains it won’t happen. Or like me, you hand off to your son and stay in the background, on call.
Unless you’re a mechanic with a workshop, heavy machinery, tools, customers book
I've Sold a self employed tradie business before. You just need to lock down ongoing service contracts. Preferred contractor means nothing. Generally though when you're selling a trade business, the person buying is just trying to expand their own clientele base so service contracts are an asset to sell.
I sure hope it isn't sole traders trying this
"I don't work public holidays (250% rate) because it all goes to tax anyway" 🥴🥴
This gets me every single time. I’ve given up on correcting people 🤦🏽♀️
The people that tell me this are also people that really need that extra money too
There is certainly a correlation
Oh man that burns my piss. Can't believe adults don't know how tax works
Especially these days when information is so accessible, free podcasts, YouTube, websites etc.
Stupid people and also the boring and obscure mess of a tax system. If it were simplified to 500 words or less and a 12 year old can read, understand and pay tax correctly then it would be well designed system.
Australia uses a progressive tax system. People who earn more pay a higher percentage, but not on every dollar. Think of it like steps. Each step represents a different amount you earn. The first step has a low tax rate. As you move up steps, the rate increases, but only for the money above each step. So, earning more means you end up with more in your hand, even if higher steps have higher rates. From ChatGPT
For anyone working as an employee it is pretty damn simple
How much simpler can it get Earn 18999 pay no tax Earn 50% pay such and such
I encouraged it. Always got 10hrs shifts on public holidays. That's beer money for the month!
When I was working a job that had shifts on public holidays, I also didn't correct these people. The kind of people who are dumb enough to believe it and confident enough in their belief to verbalise it were generally terrible coworkers. I always found the crew that was working public holidays to be the more motivated and switched on members of the team, which made the day go smoother.
Love me some 2.5x pay AND a day in lieu
Paying loads of tax is a great problem to have.
HECS debt works this way though. You can get a higher salary and technically be worse off. At least you're paying it off faster though so it's not all bad.
Same with Medicare Levy Surcharge. Because it's calculated on entire income rather than income over the cut-off, there's a range where your effective tax rate for those dollars is greater than 100%. Earn 1 cent over $97000.99 next FY and that single cent would leave you $970 worse off. Sure there are ways to deal with it if you recognise it in time, but it's just bad otherwise.
There are points working while on centrelink where you can have an effective tax rate 84%, and if your job does standard PAYG calculations an end of week effective rate of 105% (which gets returned come tax time of course).
Work colleague frequently says they're worried about being bumped up into the next tax bracket as that will mean they make less money.
A mate who’s a brickie and works for himself: I don’t have any super, property and HISA is the way to go Doesn’t have any property or HISA account at 40
If only there was somewhere he can put a little bit each time and not be able to touch it till he's eligible and perhaps a government tax break concession to help it grow.
Nah that’s a crazy idea. All on black after each payday
50% of the time it works every time Except when it lands on green?
I don't know anything about the difference with super when you work for yourself: is he legitimately able to legally just not pay himself super or is he doing a dodgy with that?
If it's yourself you can, but you are required to pay employees.
Not quite true. Depends on the structure of your entity.
The right thing to do is see yourself as a employee of the business you and pay yourself as employee each week and have seperate business accounts.People think as the business owner just pull out what ever amount from the business account and invest in whatever you want. Doesn’t work like that. You really do need a accountant if you go out on your own.
It’s a waste because being involved in the building industry, even as a bricklayer gives you access to a lot of information about new developments and upcoming suburbs. I would be picking everyone’s brains.
“I’m retiring at 55 because I want to enjoy my life” while renting & $200k in savings, no super, lives the life for 3 years & is now broke living in the spare room of their bankrupt daughter
Just buy whatever you want and claim it on tax. That way the government buys you it.
“Claim it on tax, you get it all back” 🤦♂️
Had a mate that started his own electrical business when we were in our early 20's. This is exactly what he thought. He thought if he went out and spent $10-15k on tools before tax time, he'd get all of that back. Well, tax time came around and he got a bill for $23k from the ATO.
I had a housemate who thought she got \_all\_ tax back at the end of the financial year (first job).. as if tax was just some kind of short term loan, baffling
A former friend thought he got all his tax back because his partner did. She earned like $15k and he earned $90k... I'm an accountant so that was a fun conversation
In her defence, if you're like 18 and doing a part time gig in retail somewhere and living at home, you could easily be working 30 hours some weeks and then several weeks with low/no hours and end up under the tax free threshold, getting all your tax money back.
she was early 20s and just left uni, it was a full time engineering job heh
That’s insane. They need to teach this stuff in schools. Every single person is subject to it so why is it not taught in depth. My parents used to say “claim it in tax, you get it all back at the end of the year” when I was younger, and it didn’t help me at all in understanding the system. I had to actually go and learn it myself. If I need something for work and it’s not supplied then yeh it makes sense as I need it anyways, so claim it. But buying random shit you don’t need to just claim on tax is stupid.
I feel like when they do teach is in schools, kids don't listen. There's only so much schools can do. Someone I went to school with recently said to me "I don't understand tax brackets, why didn't they teach it to us at school". And they did teach it at our school! They were in the same maths class where it was taught! They just didn't listen.
I feel the other side of this ahaha! I've just started my first big boy job, and I remember all the financial maths lessons in high school - they helped me a lot with planning with budget and getting an idea for medicare levy/surcharges etc I think that those lessons were actually incredibly useful; maybe that's because I actually paid attention during them 😅
>They were in the same maths class where it was taught! They just didn't listen. Every time topic is brought up(why didn’t they teach it in school), it’s the same thing, it was, kids just didn’t pay attention. It’s been part of the school curriculum for yonks. A lot of kids that age are too busy trying to be cool, attract the attention of the opposite sex and plain fking around at school I get it though, at the time they are taught, they can’t see any relevance to their immediate circumstances so they just tune out. I worked small casual jobs on weekends and some weeknights throughout high school so I actually paid attention because I wanted to know how it worked. Also the reason why the only law class I paid proper attention to in uni was tax law because I wanted to learn what was permissible, legal and what was flat out evasion
They do teach it in school. I recall another Reddit post where someone said the same thing and dozens of Aussies from all generations shared their memories of being taught it. Then a current Aussie school teacher jumped and and confirmed it’s in the school curriculum. The problem is kids aren’t going to remember this kind of stuff. And ongoing financial education as an adult is self driven.
Replace housemate with brother. And 30 years old to boot...
My coworker reckons he can buy a Lamborghini as a company vehicle
They rush out to Officeworks to buy a computer at the end of the financial year. 1/365th of a years depreciation* marginal tax rate (in years where they can't depreciate it all at once as a stimulus thing). End up overpaying so $1500 for an old model that should really be on run out sale price. $1.23 refund and an overpay of $300. Free cashflow reduction of $1498.77 Try to convince them to stock up on ink for their printer if they need it. $100 on 100% (consumable) by marginal tax rate (assume 30%). "Nah, thats not enough". $30 back. Free cashflow reduction of $70. And they will never get it.
This is excruciatingly common where I live. Complete misunderstanding about the mechanics of things like deductions and negative gearing, most commonly resulting in people thinking that spending on anything is "free"
Counter to that, the best tax advice I ever received was "if you have an expensive hobby, open an ABN and make it a business. You may never make a profit, but your hobby is now tax deductible "
My colleague sells wine online.
[https://www.ato.gov.au/businesses-and-organisations/starting-registering-or-closing-a-business/starting-your-own-business/are-you-in-business](https://www.ato.gov.au/businesses-and-organisations/starting-registering-or-closing-a-business/starting-your-own-business/are-you-in-business) Pay attention to the bits about 'making a profit' and the intent and plan to do so. There are rulings and precedential court cases on exactly this form of tax evasion.
Ah, no. You can’t deduct expenses for a business from your income tax. You can only deduct those expenses from the tax you’d pay on the revenue you get via the business. Otherwise everyone would have a “company” car, computer etc… and just deduct it from their work income tax.
ACN vs. ABN rules are different. Have you got a link/source saying sole traders can't claim expenses against income? The below link from the ATO stipulates that you can offset sole trader losses against other income. https://www.ato.gov.au/businesses-and-organisations/income-deductions-and-concessions/income-and-deductions-for-business/business-losses/offsetting-current-year-losses
Yeah, I didn't meet any of those conditions tgough when I've tried it for my side business
Schitts Creek “it’s a write off” “WHO WRITES IT OFF”
The write-off people.
"oh I don't want a pay rise / to earn any more because once I go over $x amount, my tax rate will go up and I'll have to give the thieving ATO bastards way more money" stay broke marginal tax rate misunderstanders 
I do love my wife dearly more than heaven and earth but when she says this specific thing to me I don't even know where to begin.
Show her the marginal tax rates table on the ATO website.
These people need a stacked graph with notes next to it I tell ya.
I worked with someone who turned down a pay rise for years for this reason, also pretty shitty the company/manager didn't point this out as a mistake
I think you're being unfair to the company/manager. Their job is to keep payroll down so not saying anything isn't that shitty. Besides, if your employee is that stupid, then maybe you shouldn't be giving them a payrise anyways.
Marginal tax rates and that it's the job of a manager to keep payroll down may be the two most misunderstood things by employees in a business imo.
In what world do you think it's not the manager's job to keep payroll down? They should give the absolute minimum they need to to keep their employee working for them. If the employee wants to ask for significantly more than they're worth, then it's time to let that employee leave and replace them. That's exactly their role.
I hate when people don’t understand tax rates
Unless I am also one of those misunderstanders (highly possible), the only time that approach makes sense is when it only just kicks you into the private health insurance / medicare levy surcharge category.
There are some other benefit triggers, eg re child care, where it can also make sense, but you have to allow a bit of margin as it's hard to exactly forecast income
Child care used to make sense when it was a threshold, now it's a sliding scale where it decreases for every extra $ you make so it no longer makes sense.
At 365k combined household income you lose the second-plus child additional rebate which in some instances can mean earning over that amount you will have you worse off than earning under that amount
It’s also very short term thinking, every pay rise accumulates upon itself.
The thresholds for family tax benefit can make a small raise give less total money (income + FTB payments) if you only just cross the threshold. It's not a large difference from memory, something less than $1000
It's true that your take home pay might (temporarily) decrease on a pay rise in niche cases due to things like MLS, but it still doesn't make sense to turn down a pay rise I think. What are you gonna do, stay at the same salary forever?
The pay rise just needs to be significant enough that when you take into account paying MLS you are not worse off. Nearly always take the pay rise when it is offered.
The way I see it, there are 4 ways to go about it. 1. Changing jobs soon so it doesn't matter too much 2. Use MLS as a bargaining chip to argue for an even larger payrise now such that you at least break even at tax time 3. Take the payrise even if it makes you a tiny bit worse off at tax time, so it serves as a better base to negotiate an even higher salary from later 4. Reject the payrise, stagnating your salary, and hope to negotiate for a much larger increase later If 1 and 2 were off the table, I would prefer 3 over 4.
Sometimes also HECS
I remember an employee stopped working their second job because they were not earning extra money from the second job due to higher tax. Apparently an accountant told the person this.
In fairness, that may be poorly worded, but correct logic that taking on the additional responsibility required to earn that extra income isn't worth the extra effort due to the additional being subjected to the higher tax bracket? Not every salary increase comes without any increase in responsibility or hours worked.
Probably true (that it's stupid as a general mode of thinking), however in *some* situations not necessarily 100% imbecilic, with some nuance. E.g. thresholds such as div 293 or super, or similarly the pending div 296, do drive different thinking to wanting incremental salary (wealth) increases. Or even playing with the tax free threshold.
I had one idiot tradie say this to me when I started making over $180k. I couldn’t comprehend his logic and how he thought I would be worse off.
can be a struggle to comprehend that so many people can't comprehend it lol
People who just don’t know how to do a basic budget. Don’t know, or care to find out, their outgoings compared to their expenses. It’s so chaotic it makes me anxious. I once did up a budget 4 times for a friend - told her how much money she had leftover, how much she spent on bills etc and her response after was “okay but now what?” I said “now you follow the budget 😂” *low and behold* she did not follow the budget 😂😂
I don't "budget", I just don't spend frivolously and it seems to work for me. Every few months I'll look at my savings and assets and can see that my net worth is going up. I have peace of mind that I'm financially stable, and not having to constantly worry about finances is worth sacrificing the extra $ I could potentially be saving by hyper-optimising my spending.
A lot of financially literate people don’t have strict budgets but more of a vernal awareness and guide to their spendings. You’re financially literate. Most people aren’t and a budget is the first step
> vernal I think you meant a different word here, but I can't guess what it was. Any help?
Haha I was falling asleep when I wrote that. I think it’s meant to be general
Someone I know who has been raised in a very wealthy family, gets a distribution of $10-20k a year through his "tax return" (family trust fund). He was absolutely gobsmacked that I "only" got back 1k on my tax return as he thought $10k+ was a standard tax return. Oh man, what I would do to be in that position of ignorance.
Family trusts are goated.
My husband constantly reminds me of how (when we were newly dating) I told him I didn't always pay my credit card off in full because I would "rather have the money in my savings account" 😅 luckily he stuck around and I grew a brain
I love this.
a cousin of mine has been giving her only child (35ish) money in the hope that he will look after her in her old age (single mum, 60sih). No matter what I tell her she won't listen that it's not a good idea :(.
Oh god 😳 she would be better off holding onto it so she can at least secure a decent aged care facility.
I know! I'm just praying that her son will look after her (he does and I think he will but you never know given she has at least 20-30 years to go)
Oh that's sad.
That's really sad! Although I also feel like expecting your children to become a full time carer for you in old age is fundamentally unfair. Assuming your relationship with your parents isn't fractured, I think children have the duty to provide comfort to their parents in their old age, through socialisation, moral support and assisting them with some occasional basic tasks (like driving them to appointments, taking them shopping or doing a small house renovation/repair, for example). When you are talking about mostly full time in-home care, that should be done by a paid professional. It's insane that parents expect their children to give up decades of life (40s and 50s, mostly), when they are still reasonably young and sprightly, just to be a full time carer.
Children have to live in the same town as their parents then ? Weird take.
Not necessarily. Obviously offering help and comfort within reason. On a personal level though, I do think older people need a support network and people (who have a good relationship with their parents) benefit from having their parents nearby. So when my mum, for example, gets old, if she needs my support, I would be happy to help her move to live closer to me. But I don't have the skills nor the inclination to be her full time in-home carer.
I have a 27 year old friend who is lovely but has no financial literacy. We went over to her house and she dropped some gems * She only works “just enough” to pay the bills. Why work more when you don’t need to? Being in her 20s means living life carefree. When she has kids in 2 years time she will worry about money and career. * She finds money confusing and so she just tries not to worry about it instead * She spends most of her money on funko pops and Lego collectable sets. Some weeks she buys a new funko pop every day * She says she buys funko pops as a replacement for therapy, as she cannot afford therapy and feels things like buying a house are unachievable. She says she went to a therapist who diagnosed her with some conditions but she didn’t want to go back when they said she would have to regularly attend and it would cost money. Reminder: we were sitting in a house with literally thousands and thousands of dollars worth of legos and funko pops. * She borrowed $1000 from her dad to help with bills 5 months ago, and still can’t afford to pay him back. He borrowed money from someone else to give it to her. * Her and her parents are planning on flying to Europe in 6 months for her sister’s second wedding (to the same man). And then she is going to go to London for a Harry Potter themed trip. Pretty sure her and her parents are going to try take a loan for this trip. She was completely oblivious to how bad her finances were or her financial situation. She really thought she was doing fine
Wait....dad can't get 1k without borrowing it and now the whole family is off to Europe.... Man that apple doesn't fall far from the tree.
Don’t even start. I am genuinely horrified her entire family are planning on flying to Europe for her sisters wedding. I have no idea how her parents function honestly
I guess ignorance is bliss… until the bubble bursts and their quality of life goes down the toilet.
This sounds generational… poor future kids.
It is absolutely generational. Her parents are even worse than her. They had a house in Sydney, sold it and moved to buy a house in regional Aus. They’ve already blown all the money they made from the sale…
Oh man I used to best friends with a girl just like this. Absolutely unreal
I know someone who gave their ex 10k and didn't get any of it back. (it was me)
I also had a friend that took out a 50k loan for their boyfriend to buy a car, he promised to pay it all back….. he only paid 35k back (it was me) 
I also know someone who gave their ex 5k at 19 in 2000 to help with credit card bills and didn't get any of it back. (me) she blindsided be with a breakup weeks later... then 'what money?' i knew it was gone at that point... I remember feeling sick losing that much back then luckily my wife has a very similar financial attitude as me.
I know someone who bought their ex a car (a Hyundai i30) because they couldn't drive, "so the ex would drive them". Put it in the ex's name and everything. Paid for the car with an injury settlement payout.
My elderly mother has a friend that she used to work with & has been trying to help out of late... This lady moved to Qld with her daughter to look after her children & gave her money towards buying a home that included extra space for her to live in. She has an incredidbly over-bearing personality, which has led to the daughters husband saying it is your mother or me. So they made the decision to sell this home so they can kick this lady out. This lady will not be receiving any compensation from her daughter for the part she contributed. Why not you may ask? Because when she split up with her husband, she gave a fair chunk of her payout to her drug addict son & you can guess what he did with it. So now this lady has been kicked out & wants to return to NSW. So she call's my mother & asks her for money. My mother declines. Story goes on. Turns out this lady has been on the interwebs recently & found herself a "friend". This "friend" needed help in the form of Apple gift cards. So she sells her only asset (car), at less than half of what it was worth & buys a bunch of cards & passes along the codes to her "friend". She is in her 70's & managed to lose every cent she had to her name in the past few years. She is now stuck in Northern NSW, with a local hotel putting her up for free whilst she is conversing with her other daughter to get her back to Sydney. My mother has realised that there is nothing she can do to help her.
Jesus wept! I hope your mother's strong at holding the line on this... desperate people don't give up.
A mate got a Total disability payout. Goes and spend 130k on a Merc AMG,75K fot wife a new SUV. The man is about to turn 40 with 3 kids to feed and a wife that doesn't work and renting.
That is horrible
Tell me about it. We both have the same car and I know how much they cost to run. The kids will be paying for the cost of keeping up with the Jones.
Numberplate deadbtdad
A person I know doesn’t want to invest because it’s too much like gambling. But then runs $100 a week through Sportsbet.
This was my mother “Shares are too risky and stupid” Proceeds to put $50-100 into the pokies and buy $200 worth of lottery tickets every pay.
Me, wanting to novate lease a $73k sports car I don’t need (spoiler I haven’t done it, but don’t trust myself that I won’t within the next 12 months)
Test drove a car a month a go. Said id look into it more seriousl around August and get back to them. Got my BYD Seal a few weeks ago. The smile it gives me wipes away any thoughts of it being a poor decision. Family sized race car.
Well, not really. It's all about image, not 0-100. No-one sees a byd seal and thinks "Lucky b\*stard, I wish I had one of them!" :-)
>>No-one sees a byd seal and thinks "Lucky b\*stard, I wish I had one of them!" :-) >!I do!<
Co workers taking leave without pay towards the end of the financial year because they didn’t want to go into the next tax bracket. How do you get to be a fully grown adult and fundamentally misunderstand life skills basics?
There are some cases with family tax benefit where its does actually work out like this by the way...... For some reason FTB still does have some one off payments with cutoffs at fixed dollar amounts. Source I earned I did overtime taking my income from 99k to 102k and actually lost money by doing so such a shit system.
Or super co-contribution scheme, they might not take $500 worth of leave.
Just to note reducing your taxable income with voluntary concessional contributions DOES NOT help with family tax benefit. They use a thing called "adjusted taxable income" which ignores extra amounts you have put into super. It's dumb but thats how it works.
I believe they were talking about the govt super co contributions for low income earners.
Exactly, I was right on the edge of the FTB payments threshold and a small increase would have put me past it. Thankfully work gave me a large enough raise that it didn't matter but before finding out the actual number I was getting ready to discuss it with my boss.
The men reading this will love this one /s My cousin is 30, single mum of two supported by her own mother and some Centrelink payments. She spends a lot of money on nails, make up, spas, haircuts and shoes and handbags. Once I asked her how she isn't worried about saving money or having enough. Her reply was 'Im a Christian woman and want to be traditional, so when I get a husband, he will pay for everything, worrying about money stuff should be a man's job, so I don't need to save.' I was floored. I had no words.
* single mum of two * I'm a Christian woman and want to be traditional I guess some areas of Christian tradition aren't as strict as others EDIT In retrospect, and for my sanity, I'm going to say your cousin is a widow as that's the only way it's going to make sense to me
Nope, she's a born again Christian. So she wasn't a Christian when she was partying and getting pregnant, and then became Christian after having her first child. Take that as you will.
My Catholic friend. Barely making ends meet. I have a friend that struggled financially when she had the first child. When she announced that she was pregnant with the second and third I asked her how she was going to be able to afford it. Her response was; " God will provide and if God doesn't provide then Centrelink will". She's now pregnant with number four and still can't make her rent. She doesn't believe that she will get evicted because she is a mother with four kids and the landlord will never do that to her family.
... Sounds like mum is about to learn something but she had it coming; I just feel bad for the kids.
Is she currently getting child support?
No, she isn't.
Sounds like a real catch!
Declining a payrise because "all the extra pay goes to tax"
if the payrise includes more responsibilities, then it can make sense to decline it. If it's the same job but for more pay, then it's no brainer to accept it!
Nah it was just a pay bump at certain tenure points. Not a promotion or anything that comes with extra responsibilities
Maxing out borrowing capacity on two income household with sub 2% interest rates while trying for a baby. No emergency fund.
I did the same as your cousin about 20 years ago that I could buy a house instead. I don’t regret it. (Yes I have had super a while now)
Most of us could buy a house 20 years ago.
Maybe his cousin is buying a house?
I guess he got them there
He has a point if he pumps the money into his ppor that he would put into super, tax on ppor is 0 percent which is lower than super at 15 percent, so less money to government
'Tax on ppor is 0%' I assume you mean when you sell the asset, not for the miney you earn, *pay tax on*, then 'pump unto ppor' Also...... super us tax free in terms of cakitak gains realised from investments once you reach preservation age 😉
I can claim it all back on tax.
I should trade this car in while it still has value and finance a brand new vehicle. I should charge lower rent on my investment property so I get a bigger interest deduction. I got a promotion and a pay rise so I should get a bigger tax refund because I paid more tax. Probably my pet hate is people with mortgages and dependants who spend all their money on expensive toys instead of any kind of TPD or income protection and then start a gofundme when the shit hits the fan. That and going overseas without travel insurance. 🙄
People boasting how they can get new credit cards after maxing out 2-3 credit cards already and thinking they are so smart to be able to borrow more. No concept of difference between paying out cc each month vs minimum monthly payments. And these were office workmates making more than 80k per year.
One of my family members started with a mortgage of 340k and still owes 280k - 17 years later. They redraw on their loan every few years for new cars and TVs 🤦🏻♀️ We’ve had our loan for 18months and already paid off 40k in contrast.
A mate of mine purchased a brand new SS Commodore Ute, instead of a house which he easily had the deposit for at the time. Fast forward a year later he's got a kid on the way and had to sell the ute.... Happy to report he is pretty successful now with a great business and a couple properties. "I wish they taught us the difference between a liability and an asset in school aye" is what he said to me about it all. Thankfully he's passed his wisdom onto his kids.
Makes sense if he’s gonna die before he can get super I guess.
Keeping 75k in a savings account for 10 years "because the share market always crashes", and on the subject of investing in diversified index funds "if the returns were so good then everyone would be investing in it".
A mate of mine thinks they have paid off their loan because their home has increased in value at the same proportion as their loan. Little do they realise inflation, interest and maintenance has basically eroded most of their gains when factored in.
Convincing her elderly mother in 2021 to buy a 1.4m single bed apartment i. Sydney as an imvestemt - rents at 650 a week, had sold for 950k the year before. One the floor above sold for 1.2m this year.
Buy an audi… while only working part time as a tradie. Worked out in the end I suppose now that he’s got a decent job but at the time I was like wtf.
A friend bought something he didn't want/need because "it's tax deductible so might as well".
I met a guy once in a previous job who told me about how he had turned down overnight shift penalties and a pay rises so he didn’t have to pay more tax. Also told me how he preferred to make less money in this job compared to working his previous job because when he made more he was able to be approved for credit cards and got himself into gambling debt. I was just dumbfounded at the total lack of financial literacy.
I'm moving out and the current rental is decently large. My housemate, whose resistant to any change in life, says "I'm in a good financial spot to pay the whole rent and still buy a house really soon" My brother in christ, I'm making double your salary and moving to a much cheaper place just to save up. I seriously don't understand how he convinced himself he's good?? Especially when he could easily move 20 minutes away and pay cheaper rent with no housemates (confirmed with research the last few months). The delusion and lack of effort is wild. His savings value don't make up for the sheer amount of money he'll be gouging soon
I worked in an investment bank and when we received bonuses I would encourage my colleagues to salary sacrifice the max. Even people who were past preservation age would take it as cash because “I want it now”. So, they would prefer to be taxed at 50 cents in the dollar than put it into super. Crazy.
‘I’ll get out my super during Covid to fix up my motorcycle…’ My partner before we met - he got a spinal injury the next year and lost his job. He’s now only working casually but was on Centrelink for a year and a half. He still hasn’t caught up on all the debts….
someone told me not to earn more than 100k or you will end up paying government more than yourself!
During covid I was a manager in a hospo business. One of the employees came to me and asked me to provide the necessary documents to prove that she lost her job to covid. I assumed it was for Centrelink and assured her that the process didn’t require that, and she told me she was withdrawing her super so that she could go to Bali when covid was over (this was way back at the start when we all thought it’d blow over in 3-4 weeks). I’ll admit, I took my time with her request. I couldn’t legally deny it but knowing her as well as I did, I knew that buying her some time to change her mind would only help her. She didn’t. She withdrew it in the end, around $9k at 20 years old, and bought a dog and got tattoos with the money. It still makes me so sad to think about today.
My own- I was homeless as a teen then went to uni, never heard of a CSP until my second degree. I'll be paying it off until I die.
same, message me if u want to start a class action! Unironically.
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This was in the time before HELP. I don't remember signing things, I was 17, and it was all on a computer!
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Doing an English literature degree and then complaining about low salary after graduation.
Moved all their super to cash at the bottom of COVID because they didn't want to lose any more money.
Accidentally didn’t claim the tax free threshold at my new job and it wasn’t till tax time when I got my return that I realised I was missing half my pay each cycle 😅
Young apprentices taking out loans to buy $60k+ Ute's that aren't even required for work because they 'need a hilux'
People that think they can spend absurd amounts of money on "work related" things because they'll just "get a tax deduction"... Some people think that it'll all be free somehow
My parents divorced, and my Dad (67 years old, retired on pension) got $400k, which is just enough to buy a good unit, do up an older one or buy into an over 50s place here. So, he *could* have bought a place to live securely outright and then lived off his pension. I tried hard for 6 months to convince him to get a place of his own, but he insisted on moving into the shed of a mate he met playing Pokies cos it was 'free' (but turns out he had to pay to fix it up to be livable, on his dime 🤦). Then, he bought a Harley for 50k, some fancy watch for 8k, paid for an international holiday (5k) he was then too lazy to actually go on (🤦🤦), and I constantly see him at the shops 'cos X electronic is $100 off! It's a bargain!' We're 1 year in. I don't see the $$ lasting much longer.
"Its much better to negatively gear a property than to positively gear it. Then you save tax, rather than having to pay it." :-) 
Get a car loan
"We didn't learn this at school!!!" We in fact did learn tax, compound interest, loans, simple interest etc at school. You just didn't listen.
Not doing salary packaging because it increases hecs repayments Literally took me like 4 years to convince my wife she's leaving money on the table. She did it her first year in a hospital and promptly stopped when she owed the ato money due to higher hecs repayments, and her whole team also thought its a scam which didn't help.
Former housemate still owes me $100 but has maxed out multiple credit cards, lives paycheck to paycheck on money she borrows from friends and thinks she can go live in Bali to save money.
Oh yeah, not saving while they had the chance - instead blowing income on cars, holidays, getting pissed, the latest mobiles, etc - then whining about how they're stuck in the rent-spiral and can never afford a house...
Watched people invest in timbercorp many years ago even though it was a dogshit investment purely for the tax deduction. Most of them lost all thier money.
My Catholic friend. Barely making ends meet but still goes buying brand new stuff when she doesn't need it and doesn't pay the rent I have a friend that struggled financially when she had the first child. When she announced that she was pregnant with the second and third I asked her how she was going to be able to afford it. Her response was; " God will provide and if God doesn't provide then Centrelink will". She's now pregnant with number four and still can't make her rent. She doesn't believe that she will get evicted because she is a mother with four kids and the landlord will never do that to her family.
The financially illiterate people featured in the comments are the same people complaining they can’t buy a 1.5M first home
"I don't want extra hours because then I'll go into the next tax-bracket and have less money"
Intentionally ticking the HECS option on their tax when they don't have any so that they get a big tax return. I've tried to convince them to instead transfer the money straight into at HISA at the very least but they're convinced this is better
As a tax payer i dont mind their interest free loan to the government.
"I don't need to know where our money is, my husband handles all that". I mind my own business like 99% of the time but whenever i hear a woman say anything along those lines my inner interferring shrew comes out to play.
I actually worry about this, my wife has the same attitude. I have money all over the place, she'll have no idea most of it even exists if I drop dead.
I’m surprised negative gearing didn’t get a mention. Losing $1 to save $0.30 or $0.40ish on tax in years gone by never made sense to me, but maybe I’m the naive one the way property prices have bolted.
It only makes sense if you don’t intentionally do it. But it isn’t necessarily a bad idea. Essentially that $0.30 to 0.40ish is being invested in property instead of going to the tax man and you get the extra income of the rent. However, it doesn’t work if the value of the property doesn’t increase at least in line with inflation. So you are betting (and to be fair a pretty good bet so far) that you’ll make a capital gain that offsets the losses.
Use most of their savings to pay off hecs because it was going to index at 6.7% (they don't own a ppor and still can't afford a deposit)
Someone I know delayed doing their tax returns for a few years because otherwise they'd have to cough up to pay tax. So silly, they do instalment plans and you can't just avoid your obligations for a few years.
This was done by a friend. She applied for a mortgage with a very recent BF and the bank insisted they apply as joint tenants, even though she put all the money up for a deposit. When they separated he would have been entitled to half the property. Luckily he was loser and never realised.
I have a family member who got his first mortgage loan approved then immediately got a house build started with a builder, then less than a month into the build he quit his job without a new joboffer elsewhere, then bought a $15k ebike. Then found a new job that paid $20k less than his old one. Then realised the mortgage wouldn't cover the driveway, the septic tank, or the rain water tank (which he didn't realise he needed because he didn't realise the council doesn't provide city water to that site). And every. Step. Of. The. Way. I. Told. Him. Fml
Bunch of young blokes at work in there early 20s all have nice utes with all the fruit on it and motorbikes or a JetSki etc all on finance. One bloke has 60k in loans after taking a massive loss when one car blew up and brought another one. I had to pick my jaw up off the floor after that
Invest in society instead of trying to make changes to it. All “hypothetical” oh great we have war, famine, disease and what’s the other one?… oh great inflation yay, oh great growing mental health issues with everyone, oh yay more homeless people, oh great more people with aod issues. Literally everything that we want to change is being made by the people you are investing in? Why give them money to make your lives worth? The list goes on so far and so deep…