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Downsizing cost trap awaits retirees – five reasons to be wary

<a href="https://theconversation.com/profiles/erika-altmann-361218">Erika Altmann</a>, <a href="https://theconversation.com/institutions/university-of-tasmania-888">University of Tasmania</a> It’s time to debunk the myth of zero housing costs in retirement if we want to understand why retirees resist downsizing. Retirees have at least five reasons to be wary of the costs of downsizing. Retirees living in middle-ring suburbs face frequent calls to downsize into apartments to free up larger allotments in these suburbs for redevelopment. Retirees who fail to downsize into smaller units and apartments are viewed as being a greedy, baby-boomer elite, stealing financial security from younger generations. It also makes sense to policymakers for retirees to move into less spacious accommodation and make way for high-density housing. Housing think-tank AHURI <a href="http://www.ahuri.edu.au/__data/assets/pdf_file/0021/14079/AHURI_Final_Report_No_286_Australian-demographic-trends-and-implications-for-housing-assistance-programs.pdf">fosters this view</a>. Yet seniors remain resistant to moving, in part because of the ongoing costs they would face. The concept of zero housing costs in retirement is based on a 1940s view of a well-maintained, single dwelling on a single allotment of land where the mortgage has been paid off. This concept is incompatible with medium- and high-density housing and refusing to acknowledge ongoing housing costs may cause significant poverty for retirees. <h2>Reason 1 – upfront moving costs are high</h2> When a house is sold the owner receives the sale funds minus the real estate and legal fees. When the same person then buys a different property to live in, they pay legal fees plus stamp duty. For cities such as Melbourne and Sydney, these costs are likely to exceed A$70,000. These high transfer costs may mean it is not cost-effective <a href="https://theconversation.com/why-older-australians-dont-downsize-and-the-limits-to-what-the-government-can-do-about-it-76931">for the person to move</a>. <h2>Reason 2 – levies are high</h2> Because apartment owners pay body corporate levies, people often assume this is just the same as periodic payment of rates, water, insurance and other costs. It is not. Fees remissions for low-income retirees for rates, power, insurance and water are difficult to apply within a body corporate environment. As a consequence, these are usually not applied to owners of apartments. The costs of maintaining essential services, such as mandatory fire-alarm testing, yearly engineering certification, lift and air-conditioning inspections, significantly increase ownership costs. When additional services are supplied, such as swimming pools, gyms and rooftop gardens, these also require periodic inspections. Garbage collection, cleaning, gardening, concierge and strata management services also <a href="https://eprints.utas.edu.au/cgi/users/home?screen=EPrint%3A%3AView&eprintid=23322">must be paid</a>. Owners of standard suburban homes choose whether they want these services, with those on fixed incomes going without them. Annual levies for apartment buildings vary, but expect to pay between $10,000 and $15,000. They <a href="https://www.strata.community/understandingstrata/faqs">may be more than this</a>. <h2>Reason 3 – costs of maintenance</h2> <figure class="align-right "><figcaption></figcaption></figure> Apartments are often sold as a maintenance-free solution for older people. The maintenance is not free. It needs to be paid for. Maintenance costs are higher in an apartment than a standard suburban home because there are more items and services to be maintained and fixed. Lifts and air conditioning need periodic servicing and fixing. This is in addition to the mandatory inspections listed above. <h2>Reason 4 – loss of financial security</h2> It is a mistaken belief that the maintenance costs that form part of the body corporate fee include periodic property upgrades. This relates to items that are owned collectively with other apartment owners. Major servicing at the ten-year mark and usually each five-to-seven years after that include painting, floor-covering replacement, and lift and air-conditioning repair or replacement. Major upgrades may also include garden redesign or other external building enhancement including <a href="https://eprints.utas.edu.au/cgi/users/home?screen=EPrint%3A%3AView&eprintid=23315">environmental upgrades</a>. All owners share these upgrade costs. Costs of upgrading the inside of an apartment (a bathroom disability upgrade, for example) are additional again. Once the body corporate committee members pledge funds towards an upgrade, all owners are required to raise their share of the funds, whether they can afford it or not. Communal choice outweighs an individual owner’s need to delay upgrade costs. Owners who buy apartments that are part of a body corporate effectively lose control of their future financial decisions. <h2>Reason 5 – loss of security of tenure</h2> Loss of security of tenure is usually associated with renters. However, the recent introduction of <a href="http://www.lpi.nsw.gov.au/__data/assets/pdf_file/0009/25965/Termination_of_a_strata_scheme_by_RG.pdf">termination legislation</a> in New South Wales gives other owners the right to vote to terminate a strata title scheme. When this occurs, all owners, including reluctant owners of apartments within that scheme, are compelled to sell. There are valid reasons why termination legislation is desirable, as many older apartment complexes are reaching the end of their useful life. Even so, as termination legislation is rolled out across the states, owner- occupiers effectively lose control of how long they will own a property for. They no longer have security of tenure, which means retirees may face an uncertain housing future in their old age. <h2>Downsizing raises poverty risks</h2> Because current data sets do not adequately take account of ongoing costs associated with apartment living, the effect of downsizing on individual households is masked. Downsizing retirees into the apartment sector creates ongoing financial stress for older people. Creating <a href="https://theconversation.com/it-will-take-more-than-piecemeal-reforms-to-convince-older-australians-to-downsize-51043">tax incentives to move</a> does not tackle these ongoing costs. Centrelink payments for of <a href="https://www.humanservices.gov.au/customer/services/centrelink/age-pension">$404 per week</a> are well below <a href="http://acoss.wpengine.com/poverty-2/">the poverty line</a>. Yet we expect retirees to willingly downsize and to be able to cede most of their Centrelink payments to cover high body corporate costs. Requiring retirees to downsize for the greater urban good will shift poverty onto retirees who could barely manage in their previously owned standard suburban home. Failing to understand the effect of high ongoing costs associated with apartment living and reinforcing the myth of zero housing costs in retirement will continue to lead to poor policy outcomes.<img style="border: none !important; box-shadow: none !important; margin: 0 !important; max-height: 1px !important; max-width: 1px !important; min-height: 1px !important; min-width: 1px !important; opacity: 0 !important; outline: none !important; padding: 0 !important;" src="https://counter.theconversation.com/content/80895/count.gif?distributor=republish-lightbox-basic" alt="The Conversation" width="1" height="1" /> <a href="https://theconversation.com/profiles/erika-altmann-361218">Erika Altmann</a>, Property and Housing Management Researcher, <a href="https://theconversation.com/institutions/university-of-tasmania-888">University of Tasmania</a> Image credits: Getty Images This article is republished from <a href="https://theconversation.com">The Conversation</a> under a Creative Commons license. Read the <a href="https://theconversation.com/downsizing-cost-trap-awaits-retirees-five-reasons-to-be-wary-80895">original article</a>.

Retirement Income

Clever Bunnings and Kmart scams to be wary of

Aussies have once again become targets to scammers offering them a job at Bunnings or Kmart that pays extremely well. Scammers are taking to Facebook targetting desperate job seekers asking for their personal details via WhatsApp. The ad is offering $48 and $75 for part-time or full-time work and attempts to appeal to those who have no experience, same day pay, and the opportunity to complete training on the phone. Bunnings confirmed that they are aware of the scam and are working on taking it down, advising job seekers to be wary. “One of the latest scams is a Facebook post asking for your personal details via WhatsApp to apply for a job with us,’ the retailer said. “Another one is an email with an offer to win a Bunnings gift card if you click a link. We place a lot of time and effort into recruiting our amazing team, and we’re in no way associated with this activity. “We also don’t ask for personal information or banking details in unsolicited communications.” Kmart also confirmed they are aware of the scam and are warning customers to not fall for it, instead to apply on the website. The ACCC’s Scamwatch explained that the ads are some of the easiest ways for scammers to steal money. “If you provide your bank account details, the scammer may use them to steal your money or commit other fraudulent activities,” their website reads. “Be suspicious of unsolicited ‘work from home’ opportunities or job offers, particularly those that offer a ‘guaranteed income’ or require you to pay an upfront fee.” Image: Facebook

Legal

Want to avoid a botched beauty procedure? This is what you need to be wary of

Recent news that more than a dozen cosmetic beauty operators <a href="https://www.theage.com.au/national/victoria/more-than-a-dozen-dodgy-beauty-salons-in-melbourne-shut-down-20190724-p52abl.html">have been shut down</a> across Victoria in the last year will give many people cause for concern. One beauty therapist was allegedly found to be <a href="https://hcc.vic.gov.au/news/288-cosmetic-service-provider-under-investigation-after-allegedly-treating-clients-back">operating at the back of a jewellery store</a>, offering risky procedures including mole removal, facial fillers and skin tightening. In many cases, plastic surgeons and dermatologists have been required <a href="https://www.theage.com.au/national/victoria/plastic-surgeons-forced-to-fix-rising-tide-of-botched-cosmetic-procedures-20190730-p52c5h.html">to treat</a> the damage caused at these rogue salons, including swelling, scarring, and infection. While low-cost procedures can be alluring, there are several things to keep in mind to ensure the treatments you’re getting are safe and reputable. <h2>Regulation</h2> The skin is the <a href="https://www.tandfonline.com/doi/full/10.3109/17453054.2010.525439">largest</a> and most accessible organ of the body, making skin procedures like laser, dermabrasion, microneedling, skin peels, toxin injections and fillers very common among unqualified or minimally qualified people and clinics. The Medical Board of Australia, supported by the Australian Health Practitioner Regulation Agency (AHPRA), are the governing bodies for medical professionals. They register practitioners, and <a href="https://www.medicalboard.gov.au/Codes-Guidelines-Policies/Cosmetic-medical-and-surgical-procedures-guidelines.aspx">enforce guidelines</a> for cosmetic medical and surgical procedures, which serve to protect the community. There have been cases where registered medical practitioners, including general practitioners, have performed procedures <a href="https://www.smh.com.au/national/nsw/push-to-ban-rogue-operators-from-using-cosmetic-surgeon-title-20181120-p50h9e.html">outside their area of expertise</a> or have not conformed with codes of conduct, sometimes with tragic consequences. But in many of these cases, the regulations in place have helped to identify offending practitioners and ensure <a href="https://www.medicalboard.gov.au/News/2018-11-20-Media-release-Former-registered-practitioner-prosecuted.aspx">disciplinary action</a> is taken. Yet for non-medical operators, for the most part, no training or educational requirements need to be met, no uniform national professional standards or codes of conduct exist, and there is no governing body to whom people can direct concerns. Essentially, these beauty salons and non-medical clinics are simply not regulated by an external body or organisation. <h2>The importance of medical training</h2> The skin is an organ, just like the heart or lungs. Its structure and function is complex. In order to practise as a dermatologist, a person needs to first complete their medical degree, and then complete a further six years of specialist training in all matters related to the skin, hair and nails. <a href="https://en.wikipedia.org/wiki/Laser">Laser treatment</a> is commonly offered to treat things like redness on the skin, brown spots, and to improve skin texture and tone. In order to deliver safe laser treatments, an accurate diagnosis is important. Is the brown spot on your cheek you want to remove a freckle, <a href="https://www.chromaderm.com.au/services/pigmentation/melasma/">melasma</a> (a discolouring of the skin) or a <a href="https://www.cancer.org.au/about-cancer/types-of-cancer/skin-cancer/melanoma.html">melanoma</a>? A person without a medical background could easily mistake a melanoma for a freckle, which could be deadly. Even if you do have just a freckle, what laser settings will be safe and effective? An intimate understanding of the structure and function of the skin and the physics of the laser is necessary to make these important decisions. The regulations surrounding who can operate a laser differ from state to state. In Western Australia, unless you’re a medical doctor, nurse, or hold a diploma or certificate IV in beauty therapy (or equivalent) with a licence, you cannot operate a laser for the purpose of hair removal. Further <a href="http://www.radiologicalcouncil.wa.gov.au/Pages/FAQ/Lasers.html">restrictions apply</a> to the use of lasers for cosmetic procedures and tattoo removal. In Queensland and Tasmania, only <a href="https://www.health.qld.gov.au/public-health/industry-environment/personal-appearance/laser-licensing">those with relevant licences</a> can operate laser devices. For the rest of the country, no regulation exists. This means <a href="https://www.racgp.org.au/afp/2017/september/navigating-the-disparate-australian-regulatory-minefield-of-cosmetic-therapy/">anyone can offer</a> skin treatments – a person who has done some online training or a weekend course could hang a “laser certificate” on the wall and start using lasers and other devices to treat skin. The same can be said for <a href="https://www.dermnetnz.org/topics/skin-needling/">microneedling</a>, the insertion of very fine, short needles into the skin for the purposes of rejuvenation or to reduce acne scarring. While some states <a href="https://ww2.health.wa.gov.au/Articles/S_T/Skin-penetration-procedures-and-the-law">regulate procedures</a> involving skin penetration, particularly around <a href="https://www2.health.vic.gov.au/-/media/health/files/collections/policies-and-guidelines/i/infection-prevention-control-guidelines---hair-beauty-tattooing-skin-penetration.pdf">infection control</a>, no uniform minimum training requirements exist for providers. The depth of penetration of the microneedling device, the type of needle chosen, and pre- and post-treatment care are critical to maximising the benefits and minimising the risks of the procedure. Similarly, for anti-wrinkle injections and fillers, an intimate understanding of facial anatomy is required to ensure safe and successful treatment. Complications can range from local injection site infection <a href="https://www.ncbi.nlm.nih.gov/pmc/articles/PMC5840246/">through to blindness</a>. To have people performing these procedures who are not medically trained is very risky. Medical professionals take precautions to minimise the risk of complications and are trained to recognise and deal with <a href="https://www.ncbi.nlm.nih.gov/pubmed/11966791">complications</a> that will inevitably occur from time to time. They can also prescribe relevant medications to help with things like infection or pain, if necessary. Non-medical providers cannot. <h2>Equipment and sanitation</h2> There are hundreds of different lasers, microneedling and skin care devices around. There are different brands, different models, and different safety features. So, varying outcomes can be seen with different devices. Any piece of equipment that penetrates the skin needs to be sterilised in a medical-grade steriliser. Sterilising the equipment prevents the transmission of blood-borne infections like hepatitis B, hepatitis C and HIV. Failing to sterilise properly or not doing so at all places patients and the community at risk. It must be said that there are many trained non-medical practitioners who adhere to infection control measures, understand what is safe and what is not, and who administer treatments in sanitary conditions. <h2>What needs to change?</h2> Regulatory bodies and the government need to work together to safeguard the community. We need to better regulate who can operate lasers and other skin devices, who can inject, cut and treat skin and in what type of environment this can take place. And we even need to regulate advertising – who can use the words “skin specialist”, “medical grade skin peels”, and so on. Because right now, anyone can. So how can a consumer know how to access treatment from a qualified practitioner? Given there are little or no regulations in some parts of the country, it’s very hard to be sure, but these tips can help: <ul> <li>if you want to be treated by a medical practitioner, look up the <a href="https://www.ahpra.gov.au/Registration/Registers-of-Practitioners.aspx">APHRA website</a> to see if the practitioner you are going to consult with is registered</li> <li>you only get what you pay for. If consultations and treatments are very cheap, you may want to look into the quality of the equipment and the experience of the provider</li> <li>don’t believe everything you read online. Medical professionals are <a href="https://www.medicalboard.gov.au/News/2018-0516-New-tool-about-testimonials.aspx">not allowed</a> to have testimonials on their websites, so don’t decide on a provider on this basis</li> <li>trust your gut – if something doesn’t feel right about the place or person, walk away.</li> </ul> Image credits: Getty Images This article first appeared on <a rel="noopener" href="https://theconversation.com/want-to-avoid-a-botched-beauty-procedure-this-is-what-you-need-to-be-wary-of-120970" target="_blank">The Conversation</a>.

Beauty & Style

‘Drained and wary of the future’: why you might feel different about New Year’s resolutions this year

At the beginning of each year, many people make vows to either do or not do something to improve their life in some way. The fresh start of a new year is magically equated with a fresh start to life and often imbued with renewed hope that this year things will be better. As we enter 2022, after two years of living with COVID-19, this hope may be stronger than usual. The pandemic’s impacts have ranged from deaths and other adverse effects on physical and mental health, to huge changes in employment, income, travel, leisure and the ability to socialise. The effect on individuals has varied considerably, depending on what their life was like beforehand, how much it has affected them personally, and their own resilience. Based on discussions with colleagues and patients, we may see resolutions driven by loss, guilt and anger, plus a rush on common types of self-improvement resolutions and a greater drive for overall life changes. Resilience How we respond to the shocks of the pandemic depends in part on our <a rel="noopener" href="https://www.tandfonline.com/doi/full/10.3402/ejpt.v5.25338" target="_blank">resilience</a>: the ability to adapt well in the face of adversity, trauma, tragedy, threats or significant sources of stress. It involves “bouncing back” from difficult experiences, and it can also involve personal growth. People who have lost loved ones to COVID may respond with New Year’s resolutions, but they may take positive or negative forms. Positive resolutions might be commitments to honour the deceased in some way, or to live well because your loved one cannot. A pact or vow made with or to a deceased loved one to “live life better” can be a powerful, positive motivator to change bad health habits such as smoking, excessive drinking or gambling, although professional help is advisable to ensure safe and lasting change. Negative resolutions, often driven by strong feelings of anger and despair, might be vows to seek revenge or punish those who may seem responsible for the death of their relative or friend. “Revenge resolutions” are not usually helpful adaptations and may spring from a sense of guilt arising from not being able to save their loved one or spend time with them. People who survived a COVID infection while a loved one did not, in particular, <a href="https://doi.apa.org/fulltext/2020-43452-001.html">often experience strong feelings of guilt</a>. Guilt-driven resolutions are driven by powerful emotions. They are likely to be realised in some form throughout the year, when hopefully the driving emotions become less intense by the following year. Personal improvement Since the virus has posed a major health risk, it would make sense for more people than ever to choose the New Year to resolve to improve their own health. Quitting smoking is a very common New Year’s resolution, and it seems even more sensible than usual amid a global pandemic of a virus that mainly attacks the respiratory system. However, as many people have found in the past, giving up cigarettes is very difficult and often requires significant planning and help to succeed. <img src="https://images.theconversation.com/files/436539/original/file-20211209-19-167gm8e.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" alt="" /> Quitting smoking or other drugs is a very common New Year’s resolution. But while the pandemic may have increased the desire for change, it won’t necessarily make it any easier to achieve. Shutterstock While the pandemic may have made the desire for change stronger, it does not magically make resolutions any easier to achieve. This applies similarly to resolutions to change the use of alcohol or other drugs, which would also benefit from planning and professional help. Weight loss is another favourite New Year’s resolution. The famous “COVID kilos” will no doubt drive more people than usual to resolve to lose weight in 2022. Crash diets are common, but are often abandoned by February. Careful eating and an exercise plan accompanying the resolution will make it more likely to succeed. Bigger changes While COVID is likely to give an extra edge to common resolutions, we are also likely to see a surge in resolutions for overall “lifestyle change”. Many people’s attitudes to work and family have changed dramatically over the past two years, due to travel restrictions, work or study from home, and little socialisation with those outside our immediate families. This hugely significant alteration in our way of life has caused many people to reconsider their futures. Many have found great enjoyment in spending time with family and are now rethinking their work–home balance. Discovering that working from home is possible has made many people reconsider their career options moving into 2022. Some <a rel="noopener" href="https://www.bloomberg.com/news/articles/2021-05-10/quit-your-job-how-to-resign-after-covid-pandemic" target="_blank">experts anticipate</a> a post-pandemic work exodus, dubbed the “great resignation”, in which millions of people, from frontline workers to senior executives, may resign from their jobs. <img src="https://images.theconversation.com/files/436541/original/file-20211209-68670-gy08bg.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" alt="" /> As working from home has become more common, attitudes to work and family have shifted. Shutterstock According to <a rel="noopener" href="https://www.microsoft.com/en-us/worklab/work-trend-index/hybrid-work" target="_blank">recent research</a> by Microsoft, more than 40% of the global workforce are considering leaving their employers. This trend is expected to be replicated in different industries in the USA, UK and Europe. In Australia, <a rel="noopener" href="https://theconversation.com/australias-great-resignation-is-a-myth-we-are-changing-jobs-less-than-ever-before-170784" target="_blank">this trend is not evident</a>, but nonetheless, a New Year’s resolution may be to determine a different type of employment for 2022 and beyond. Two paths for 2022 COVID-19 has left most of us drained and wary of the future. Many people believed the pandemic would end in 2020, but 2021 brought more infection, lockdowns and restrictions. In times of trauma, when the future is uncertain, there can be a polarisation of behaviours. Some people adopt a “devil may care, live for now” attitude to life, with greater risk taking. Others take the opposite attitude, and exercise extreme caution and narrow their existence further. Both groups may well make New Year’s resolutions to fit their approach to life.<img style="border: none !important; box-shadow: none !important; margin: 0 !important; max-height: 1px !important; max-width: 1px !important; min-height: 1px !important; min-width: 1px !important; opacity: 0 !important; outline: none !important; padding: 0 !important; text-shadow: none !important;" src="https://counter.theconversation.com/content/172305/count.gif?distributor=republish-lightbox-basic" alt="The Conversation" width="1" height="1" /> <a rel="noopener" href="https://theconversation.com/profiles/jayashri-kulkarni-185" target="_blank">Jayashri Kulkarni</a>, Professor of Psychiatry, <a rel="noopener" href="https://theconversation.com/institutions/monash-university-1065" target="_blank">Monash University</a> This article is republished from <a rel="noopener" href="https://theconversation.com" target="_blank">The Conversation</a> under a Creative Commons license. Read the <a rel="noopener" href="https://theconversation.com/drained-and-wary-of-the-future-why-you-might-feel-different-about-new-years-resolutions-this-year-172305" target="_blank">original article</a>.

Mind

Gina Rinehart tells private school students to be wary of ‘climate propaganda’

The richest woman in Australia, mining magnate Gina Rinehart, caused a stir recently when a video she had recorded for her alma mater had to be cut because of her controversial views. In the video, recorded by Rinehart for the 125th anniversary of her alma mater, St Hilda’s Anglican School for Girls in Perth’s Mosman Park, Rinehart speaks for 16 minutes instead of the required 5, and only managed to stay on topic for so long. She starts out talking about her family’s connections to the school, which go back four generations. About five minutes in, however, she begins critiquing the ‘propaganda’ she believes students are being taught regarding climate change. “It’s very important in my view that today’s parents or guardians or grandparents ask their children each and every day what they are learning at school, counter any propaganda and address their concerns with teachers directly,” she says in the video. “Please be very careful about information spread on emotional basis, or tied to money, or egos, or power-seekers, and always search for the facts, even if the tide is against you, and it’s not considered popular. “Facts may not be popular, but that shouldn’t mean they should be overlooked.” <img style="width: 500px; height: 265.867418899859px;" src="https://oversixtydev.blob.core.windows.net/media/7844698/screen-shot-2021-10-08-at-12822-pm.png" alt="" data-udi="umb://media/e1e0fe218b2c41e197cd72636942ef45" /> Faculty members cut the video short, but the entire video, along with a transcript, can still be viewed on Rinehart’s <a href="https://www.ginarinehart.com.au/speech-by-mrs-gina-rinehart-celebrating-125-years-of-st-hildas-anglican-school-for-girls/">website</a>. In the full-length speech, she mentions inviting infamous climate deniers such as Lord Monckton and Professor Ian Plimer to speak at the school in response to students being shown Al Gore’s 2006 documentary An Inconvenient Truth. When asked for his thoughts on Rinehart’s views, WA premier Mark McGowan said that it was “well accepted by scientists and governments and people all over the world that carbon emissions by us are increasing temperatures. “That’s certainly what I believe, and the overwhelming majority of scientists believe, and I think we should work on that basis,” he said. It is widely accepted by bodies like <a href="https://climate.nasa.gov/effects/">NASA</a>, <a href="https://www.un.org/sustainabledevelopment/climate-change/">the UN</a>, and the <a href="https://www.climatechangeinaustralia.gov.au/en/">CSIRO</a> that climate change is real, is occurring as the result of humanity’s impact on the climate, and will only get worse in the decades to come if more is not done to combat it. Meanwhile, the claims made by skeptics like <a href="https://skepticalscience.com/Monckton_Myths_arg.htm">Lord Monckton</a> and <a href="https://skepticalscience.com/skeptic_Ian_Plimer.htm">Professor Plimer</a> denying the realities of climate change have been widely and thoroughly debunked. Image: Scott Barbour/Getty Images

News

5 reasons to be wary of downsizing

It’s time to debunk the myth of zero housing costs in retirement if we want to understand why retirees resist downsizing. Retirees have at least five reasons to be wary of the costs of downsizing. Retirees living in middle-ring suburbs face frequent calls to downsize into apartments to free up larger allotments in these suburbs for redevelopment. Retirees who fail to downsize into smaller units and apartments are viewed as being a greedy, baby-boomer elite, stealing financial security from younger generations. It also makes sense to policymakers for retirees to move into less spacious accommodation and make way for high-density housing. Housing think-tank AHURI <a href="http://www.ahuri.edu.au/__data/assets/pdf_file/0021/14079/AHURI_Final_Report_No_286_Australian-demographic-trends-and-implications-for-housing-assistance-programs.pdf">fosters this view</a>. Yet seniors remain resistant to moving, in part because of the ongoing costs they would face. The concept of zero housing costs in retirement is based on a 1940s view of a well-maintained, single dwelling on a single allotment of land where the mortgage has been paid off. This concept is incompatible with medium- and high-density housing and refusing to acknowledge ongoing housing costs may cause significant poverty for retirees. Reason 1 – upfront moving costs are high When a house is sold the owner receives the sale funds minus the real estate and legal fees. When the same person then buys a different property to live in, they pay legal fees plus stamp duty. For cities such as Melbourne and Sydney, these costs are likely to exceed A$70,000. These high transfer costs may mean it is not cost-effective <a href="https://theconversation.com/why-older-australians-dont-downsize-and-the-limits-to-what-the-government-can-do-about-it-76931">for the person to move</a>. Reason 2 – levies are high Because apartment owners pay body corporate levies, people often assume this is just the same as periodic payment of rates, water, insurance and other costs. It is not. Fees remissions for low-income retirees for rates, power, insurance and water are difficult to apply within a body corporate environment. As a consequence, these are usually not applied to owners of apartments. The costs of maintaining essential services, such as mandatory fire-alarm testing, yearly engineering certification, lift and air-conditioning inspections, significantly increase ownership costs. When additional services are supplied, such as swimming pools, gyms and rooftop gardens, these also require periodic inspections. Garbage collection, cleaning, gardening, concierge and strata management services also <a href="https://eprints.utas.edu.au/cgi/users/home?screen=EPrint%3A%3AView&eprintid=23322">must be paid</a>. Owners of standard suburban homes choose whether they want these services, with those on fixed incomes going without them. Annual levies for apartment buildings vary, but expect to pay between $10,000 and $15,000. They <a href="https://www.strata.community/understandingstrata/faqs">may be more than this</a>. Reason 3 – costs of maintenance Apartments are often sold as a maintenance-free solution for older people. The maintenance is not free. It needs to be paid for. Maintenance costs are higher in an apartment than a standard suburban home because there are more items and services to be maintained and fixed. Lifts and air conditioning need periodic servicing and fixing. This is in addition to the mandatory inspections listed above. Reason 4 – loss of financial security It is a mistaken belief that the maintenance costs that form part of the body corporate fee include periodic property upgrades. This relates to items that are owned collectively with other apartment owners. Major servicing at the ten-year mark and usually each five-to-seven years after that include painting, floor-covering replacement, and lift and air-conditioning repair or replacement. Major upgrades may also include garden redesign or other external building enhancement including <a href="https://eprints.utas.edu.au/cgi/users/home?screen=EPrint%3A%3AView&eprintid=23315">environmental upgrades</a>. All owners share these upgrade costs. Costs of upgrading the inside of an apartment (a bathroom disability upgrade, for example) are additional again. Once the body corporate committee members pledge funds towards an upgrade, all owners are required to raise their share of the funds, whether they can afford it or not. Communal choice outweighs an individual owner’s need to delay upgrade costs. Owners who buy apartments that are part of a body corporate effectively lose control of their future financial decisions. Reason 5 – loss of security of tenure Loss of security of tenure is usually associated with renters. However, the recent introduction of <a href="http://www.lpi.nsw.gov.au/__data/assets/pdf_file/0009/25965/Termination_of_a_strata_scheme_by_RG.pdf">termination legislation</a> in New South Wales gives other owners the right to vote to terminate a strata title scheme. When this occurs, all owners, including reluctant owners of apartments within that scheme, are compelled to sell. There are valid reasons why termination legislation is desirable, as many older apartment complexes are reaching the end of their useful life. Even so, as termination legislation is rolled out across the states, owner- occupiers effectively lose control of how long they will own a property for. They no longer have security of tenure, which means retirees may face an uncertain housing future in their old age. Downsizing raises poverty risks Because current data sets do not adequately take account of ongoing costs associated with apartment living, the effect of downsizing on individual households is masked. Downsizing retirees into the apartment sector creates ongoing financial stress for older people. Creating <a href="https://theconversation.com/it-will-take-more-than-piecemeal-reforms-to-convince-older-australians-to-downsize-51043">tax incentives to move</a> does not tackle these ongoing costs. Centrelink payments for of <a href="https://www.humanservices.gov.au/customer/services/centrelink/age-pension">$404 per week</a> are well below <a href="http://acoss.wpengine.com/poverty-2/">the poverty line</a>. Yet we expect retirees to willingly downsize and to be able to cede most of their Centrelink payments to cover high body corporate costs. Requiring retirees to downsize for the greater urban good will shift poverty onto retirees who could barely manage in their previously owned standard suburban home. Failing to understand the effect of high ongoing costs associated with apartment living and reinforcing the myth of zero housing costs in retirement will continue to lead to poor policy outcomes. Written by Erika Altmann, Property and Housing Management Researcher, University of Tasmania. Republished with permission of <a href="https://theconversation.com/downsizing-cost-trap-awaits-retirees-five-reasons-to-be-wary-80895">The Conversation</a>.<img style="border: none !important; box-shadow: none !important; margin: 0 !important; max-height: 1px !important; max-width: 1px !important; min-height: 1px !important; min-width: 1px !important; opacity: 0 !important; outline: none !important; padding: 0 !important; text-shadow: none !important;" src="https://counter.theconversation.com/content/80895/count.gif?distributor=republish-lightbox-basic" alt="The Conversation" width="1" height="1" />

Retirement Income

Why you should always be wary of texts from numbers starting with 19

More and more Aussies are being scammed by text messages, particularly premium service texts, according to <a href="https://www.finder.com.au/">finder.com.au</a>. Mobile premium service texts usually come from numbers that start with 19. They can be about anything from news to horoscopes, ringtones, adult services, competitions and games. Although some people may have signed up to these services, many people receive these unsolicited messages, and can be charged by scammers for just receiving the text. Alex Kidman, Tech Expert at finder.com.au, says scammers are smart and if their tactics work, they keep using them. “We may occasionally receive a nonsensical text that we read and then casually delete. What some people might not realise, is that a $4 or $6 charge appears on their bill later that month just for receiving it if it’s from a premium service you’ve unwittingly signed up for.” He added: “If you receive a text from a service you don’t recognise or don’t remember signing up to, chances are it’s a scam. Call your telco and ask for the number to be blocked. In fact you can get all premium service numbers blocked.” The ACCC ScamWatch data shows mobile premium service scams are on the rise, with Aussies already cheated out of $44,179 in 2018 alone. Since 2015, mobile premium service scams have robbed Aussies of $153,197. “Don’t be fooled by messages offering gift vouchers from well-known brands or competitions with great prizes. If it sounds too good to be true, it usually is,” said Kidman. “Always check your bill. If it’s higher than usual and not related to excess data charges or overseas calls, look out for premium service charges.”

Legal

Why keyboard warriors should be wary

Michael Douglas, Senior Lecturer in Law, University of Western Australia, examines the legal risks of online defamation. Having suffered some terrible product or service, there is something darkly satisfying about publishing a scathing online review. This may not be virtuous or kind, but it can be cathartic. However, if your online review is disparaging of a person’s reputation, that person could sue you for defamation. The rise of the keyboard warriors Keyboard warriors like me have benefited from an explosion in the number of review <a href="https://www.choice.com.au/" target="_blank">websites</a> and <a href="https://itunes.apple.com/us/app/foursquare-city-guide/id306934924?mt=8" target="_blank">apps</a> in recent years. These cover everything from <a href="https://www.zomato.com/" target="_blank">food</a>, to <a href="https://www.tripadvisor.com.au/" target="_blank">travel</a>, to <a href="https://www.australiandoctor.com.au/news/doctor-rating-sites-fundamentally-flawed" target="_blank">medical professionals</a>. Platforms like <a href="http://www.austlii.edu.au/cgi-bin/viewdoc/au/cases/wa/WADC/2015/126.html" target="_blank">Facebook</a> and Google make it very easy to leave a scathing online review. Mobile technology enables customers to vent, or compliment, even while they are still in the store. Review websites keep consumers informed while letting the market know what works and what does not. In extreme cases, consumer reviews can even move corporate giants to <a href="https://www.cnbc.com/2017/11/28/eas-day-of-reckoning-is-here-after-star-wars-game-uproar.html" target="_blank">change their policies</a>. For those on the other side of the equation, online reviews can be terrifying. I know from experience – anonymous student evaluations are part and parcel of being a <a href="https://au.ratemyteachers.com/" target="_blank">university lecturer</a>. Bad reviews can be <a href="https://www.businessinsider.com.au/owner-yelp-is-bad-for-small-business-2013-4?r=US&IR=T" target="_blank">disastrous</a> for small businesses. Understandably, some reviewees will be motivated to silence negative reviewers. In extreme cases, they may even go to court. You can be sued for a scathing review In Australia, freedom of speech is not as free as some might think – even when “spoken” on the internet. Although we have an <a href="https://www.humanrights.gov.au/freedom-information-opinion-and-expression" target="_blank">implied freedom of political communication in our constitution</a>, we do not have a US-style right to free speech. Defamation law places significant limitations on our freedom of speech. Courts have the power to force a person to <a href="https://www.researchgate.net/publication/321306294_Douglas_M_2017_The_exorbitant_injunction_in_X_v_Twitter_Communications_Law_Bulletin" target="_blank">remove content from the internet</a>, or pay damages to the plaintiff for harm done to their reputation. Failure to comply could mean <a href="https://www.smh.com.au/business/companies/blogger-shane-dowling-jailed-for-contempt-for-naming-tim-worners-alleged-lovers-20170810-gxt4px.html" target="_blank">prosecution for contempt</a>. Professional reputation is highly valued by defamation law. Damages can be significant if defamation causes an actual loss of business, or even a <a href="https://theconversation.com/rebel-wilsons-4-5-million-win-a-sobering-reminder-that-defaming-a-celebrity-can-be-costly-83968" target="_blank">loss of opportunity</a>. In the absence of proven economic loss, substantial “general” damages may still be awarded as a consolation for <a href="https://theconversation.com/hockeys-defamation-win-is-dark-news-for-democracy-and-free-speech-44129" target="_blank">hurt and distress</a>. When defamation occurs online, damages awards may increase to account for the “<a href="https://papers.ssrn.com/sol3/papers.cfm?abstract_id=2811967" target="_blank">grapevine effect</a>”: the way salacious content tends to be shared and repeated on the internet. However, there are a couple of barriers that could make it harder to sue. Firstly, some “persons” cannot sue. Under Australia’s <a href="http://www8.austlii.edu.au/cgi-bin/viewdoc/au/legis/wa/consol_act/da200599/s9.html" target="_blank">uniform defamation laws</a>, certain corporate bodies – that is, companies – do not have a cause of action in defamation. Unlike overseas, large companies <a href="https://www.theguardian.com/lifeandstyle/2003/jun/04/foodanddrink.shopping" target="_blank">like McDonald’s</a> can’t sue under Australian defamation law, but this does not apply to <a href="https://www.caselaw.nsw.gov.au/decision/54a6364e3004de94513d916a" target="_blank">not-for-profits</a>, or small businesses with 10 employees or less. Hotheads should proceed with caution before slagging off their corner café. Secondly, a review must identify a person directly or indirectly in order for someone to be able to sue for defamation. A generic Facebook rant about “how bad restaurants are in blah suburb” will not meet the requirements of “identification”. These barriers are not insurmountable. In 2014, a group of restaurateurs were awarded more than <a href="https://www.dailytelegraph.com.au/news/nsw/former-reviewer-matthew-evans-who-cost-fairfax-600000-has-turned-to-farming-and-television/news-story/3698276fa706f7f382a33cc2f5759c90" target="_blank">A$600,000 in damages for a defamatory review in The Sydney Morning Herald</a>. Fairfax stood by the critic who made the harsh review, which remained online for years. While the average rant on Zomato won’t cause a restaurant to close down, this case illustrates that an expression of opinion about a business can have very serious consequences. What to do if you’re sued Take it seriously. See a lawyer. In 2017, <a href="https://www.smh.com.au/national/nsw/sydney-surgeon-munjed-al-muderis-awarded-480k-over-online-defamation-by-patient-20170608-gwn17a.html" target="_blank">Sydney surgeon Munjed Al Muderis was awarded A$480,000 damages</a> for a defamatory online campaign of abusive reviews by a former patient and the patient’s brother. There was no evidence of any medical negligence or wrongdoing, and the size of the damages award was partly attributable to the poor conduct of the defendants – <a href="https://www.caselaw.nsw.gov.au/decision/5936545fe4b074a7c6e1657a" target="_blank">they failed to participate in the proceedings</a>. Having been served with a defamation claim, a lawyer may advise that you’re protected by defences to defamation. For example, a defence is available if your review is <a href="http://www7.austlii.edu.au/cgi-bin/viewdoc/au/legis/wa/consol_act/da200599/s25.html" target="_blank">substantially true</a>; or if you have expressed an <a href="http://www7.austlii.edu.au/cgi-bin/viewdoc/au/legis/wa/consol_act/da200599/s31.html" target="_blank">honest opinion</a> on a matter of public interest, and your opinion is based on proper material. These defences might allow you to defend a trial, but they will not necessarily prevent you from being sued. They also come with practical challenges: for example, the reviewer, rather than reviewee, must prove the substantial truth of the publication. While your lawyer is dealing with those challenges, you will be dealing with your lawyer’s bills. Defending defamation is expensive, even if you win. What if your review was anonymous? Not all review platforms require you to disclose your identity. A recent example is <a href="http://www.ratemyboss.org.au/" target="_blank">Rate My Boss</a>, a website created by union United Voice, which allows workers to review their employers anonymously. Anonymity makes sense from the workers’ perspective. From the employers’ perspective, the anonymity problem may be avoided by pursuing the publishers of the website rather than the reviewer. This is the standard model for a lot of defamation litigation; media organisations will often defend defamation on behalf of their writers. A disgruntled reviewee may go one step further and go after the internet giants that link people to defamatory content. These intermediaries have much deeper pockets and the practical ability to prevent something from being accessed. Whether Google should be responsible as “publisher” of its search engine content is <a href="http://www.austlii.edu.au/au/journals/SydLRev/2017/24.html" target="_blank">about to be tested</a> in the High Court. As for you, the reviewer: if you have been particularly nasty in an anonymous review, the reviewee may litigate to find out who you are. It may be tricky, but a would-be plaintiff has options: a couple of years ago, movie pirates were <a href="http://www.news.com.au/technology/online/piracy/dallas-buyers-club-war-with-iinet-downloaders-finally-comes-to-an-end/news-story/a51ba7091b090be07a559a3cab8ad7f1" target="_blank">threatened with the prospect of a court order</a> compelling iiNet to reveal their identities in a copyright dispute. The context is different, but the anxiety felt by those Matthew McConaughey fans demonstrates that online naughtiness is not as anonymous as we might think. Play nice and none of this matters If you play the ball, not the man; if you focus on what you actually experience, rather than making grandiose claims; and if you focus on the truthful aspects of a product or service in a harsh but fair review, you are less likely to fall afoul of defamation law. What are your thoughts? Have you ever left a scathing review online? Written by Michael Douglas. Republished with permission of <a href="http://www.theconversation.com" target="_blank">The Conversation</a>.<img width="1" height="1" src="https://counter.theconversation.com/content/92595/count.gif?distributor=republish-lightbox-advanced" alt="The Conversation"/>

Legal

3 cruise scams you need to be wary of

As we live in the Information Era, it is as important as ever to keep a watchful eye out for dangerous scams. Here are three cruise scams you need to be wary of. 1. The letter scam The most common cruise scam are letters that are sent to people’s homes gifting them a “free” cruise. The letters often contain an official cruise line logo to make it look legitimate. Common cruise lines that are illegitimately used in these letters include Carnival, Royal Caribbean and Norwegian. If you receive one of these letters, it is important to see who it is from. Generally, these letters are from travel agencies that will charge you a significant fee for your “free” cruise. They will make you pay a booking fee, port taxes/fees and then try to upgrade you from an inside stateroom. By the time you have finished paying all these add-ons, you will find that this trip is definitely not free! 2. The telephone scam Another common cruise scam is a call telling you that you have won a free cruise. After announcing the news, they will then ask for a valid credit card number to book in the cruise. Obviously, you should never share your credit card details over the phone to someone you don’t know. If something is too good to be true, the chances are they are probably taking you for a ride. 3. The Facebook scam These scams are growing increasingly popular on Facebook as many users get caught up in sharing posts without validating the source. The scams create a Facebook account in the name of a cruise line such as Disney or Royal Caribbean and say that if you share a post, you will go into the running to win a free cruise. However, if you click on the page, you will find out that it is not the official account of the cruise. To confirm if it is an official account, look for the blue tick next to their name. These scammers try to get people to share the post so that they can create a large Facebook page and fill user’s newsfeeds with products they are trying to sell. Have you ever seen any of these scams? If so, share your experience in the comments below.

Travel Trouble

17 weight gain traps on cruise ships to be wary of

Don’t come home with too much excess baggage. 1. All-inclusive mentality Just because it’s free, doesn’t mean you have to eat/drink it. Many people get into the mindset that they should take advantage of every tasty thing a cruise ship has on offer because they’ve already paid for it. You don’t! 2. No routine A stable and healthy routine is proven to be one of the best ways to keep your weight in check. On a cruise, that all goes out the window – and the kilos creep on… 3. Portion sizes It’s only too easy to load up your plate at the buffet and eat twice what you normally would. Choose a small plate and take it easy. 4. Soft drink Many cruise ships include all you can drink soda with meals, but they are just empty calories in a glass. Stick to water. 5. Cooked breakfast Most people don’t eat a full cooked breakfast every day at home, so it’s a shock to the system to start when on a cruise. Try to start the day with a light meal 6. Too much booze How often do you drink at home? A couple of times a week? On a cruise you’re likely to imbibe every day and alcohol can quickly add to your waistline. Keep it to one or two at dinner and aim for an alcohol free day now and then. 7. Creamy cocktails There can be more than 200 calories in a piña colada, so creamy cocktails add up quickly. Try vodka and soda water or a white wine spritzer instead. 8. Constant snacking Food is available 24 hours a day on a ship, there are multiple food outlets and you don’t have to cook any of it. So it’s very easy to fall into a pattern of eating round the clock. 9. Multiple courses How often do you eat a full three-course lunch and three-course dinner at home? Hardly ever. But on a cruise ship, it’s the norm and you’ll quickly notice the impact. 10. Extra bread Stay away from the bread basket! It will be brought to your table every time you dine at the main or specialty restaurants and adds heaps of unnecessary calories to your meal. 11. Lack of exercise Sure, there’s a gym onboard, but more often than not you’ll find it empty. People pack their exercise gear with the best of intentions but most fall out of their usual exercise regime. 12. Local delicacies When you arrive in a new destination, trying the food is usually top of the list. It’s amazing how many extra calories you can pack in just by sampling a few local treats. 13. Using the elevators On a modern cruise ship, you could get away without taking the stairs for weeks at a time. Burn some excess calories and steer clear of the elevators. 14. Being unprepared At breakfast, grab some pieces of fruit from the buffet so you can snack throughout the day. Otherwise, you’ll head straight for the burger stand or ice cream bar when you’re feeling puckish. 15. Lazy excursions Many shore excursions involve little more than sitting on a bus or lying on a beach all day – hardly conducive to fitness. Try to choose active excursions where you can. 16. Added extras Cooking classes, dessert demonstrations, movie nights with popcorn – there are lots of opportunities onboard to consume food outside of meal times. Be aware of the extras you’re eating every day. 17. Confusing boredom with hunger Sea days can stretch out (especially if the weather is bad) so you might try to fill some time with eating rather than activities. Stop and ask yourself if you’re really hungry.

Travel Trouble

What Amazon means for Aussie shoppers

The expansion of US online giant Amazon in Australia will most likely be a game-changer in the retail landscape, transforming the way we shop and threatening the supremacy of established local retailers. "We are going to destroy the retail environment in Australia," an Amazon executive behind the Australian roll-out told Justin Braitling, the chief investment officer at Watermark Funds Management, late last year. Australians, of course, can already buy a limited range of items from Amazon.com.au. Presently these are mostly limited to entertainment, including Kindle e-books, audiobooks, e-readers, and some items on the streaming site Amazon Prime Video. So what will be available when Amazon rolls out its full suite of retail services into the Australian market? Perhaps an easier question is: what won't be available? The US Amazon site offers almost everything, such as groceries, beauty products, wine, clothing and fashion, furniture, musical instruments, pet supplies, appliances, and power and hand tools. Type any search item into Amazon's US site, and odds are it will be there, and at a heavily discounted price. Before launching its operation in Australia, it's understood Amazon will go through and collect price-points on everything, before setting prices at a 30 per cent discount. The roll-out here is expected to be gradual, with an initial focus on consumer and home electronics, including non-perishables, such as canned food and other household necessities. But the US provides a glimpse of what the future could look like in Australia. Customers in the US who sign up to Amazon Prime, for an annual cost of $US99, receive free, two-day shipping on items; unlimited access to Amazon Prime Video, similar to Netflix, with a library of movies and television shows; unlimited access to Prime Music, a music streaming service; the ability to borrow books from a Kindle lending library; and access to a restaurant meal delivery service in major cities. Amazon Prime members can also access Prime Now, offering free delivery within two hours in certain locations. For an extra $US14.99 a month for an Amazon Fresh membership, a customer can order their groceries or other items from supermarkets and shops in major areas and have them delivered within hours. About 60 million US households have signed up for Amazon Prime. Amazon has $US1 of every $US2 of e-commerce sales in the US and its market share is growing 20 years after it was founded by Jeff Bezos. How it works now in Australia Determined Australian bargain-hunters can already buy items from the US Amazon store that aren't available locally, but it can be a time-consuming and more expensive process. Amazon will often refuse an Australian billing address or credit card when an attempt is made to buy from the US site, but third-party forwarding businesses have popped up to fill this void. Shoppers can sign up to these businesses, which provide an intermediary US address, from which the item will be forwarded to Australia. To skirt around the billing problems, Australian shoppers pay the intermediary business, which then pays Amazon on the shopper's behalf. Essentially, Amazon's further expansion into Australia will eliminate this prolonged process. Local warehousing will dramatically slash delivery times, shaking things up for established retailers. Amazon already does A$1 billion in sales in Australia by shipping from overseas, according to analysis by Morgan Stanley. How will the new process work? Amazon has confirmed it is actively looking for a warehouse, the first of many in Australia, with floor space of up to 93,000 square metres, or about five MCGs. A decision hasn't been made on a location but it is likely to be in Brisbane, Sydney or Melbourne. The news was confirmed with a brief written statement from the company overnight. "Amazon Web Services launched an Australian region in 2012, we launched a Kindle store on amazon.com.au in 2013 and we now have almost 1000 employees in the country," Amazon said. "The next step is to bring a retail offering to Australia, and we are making those plans now. "We are excited to bring thousands of new jobs to Australia, millions of dollars in additional investment, and to empower small Australian businesses through Amazon Marketplace. "We are optimistic that by focusing on the things we believe customers value most - low prices, vast selection, and fast delivery - over time we'll earn the business of Australian customers." There has been previous speculation that Amazon would start rolling out its services in September. Amazon Marketplace, whereby small players can sell their wares on Amazon, will also be a focus in Australia. Some Australian businesses are already using this via the US to gain access to international markets. Damage to local retailers Late last year, Braitling warned of the impending damage to the profit margins of local retailers from the arrival of Amazon in Australia. "They [Amazon] will be dropping distribution centres and performance centres in every state next year," Braitling told The Australian Financial Review. "They will be doing general merchandise and they will be doing fresh as well. "They will also be putting physical stores on the ground which I don't think anyone knows about. "These will mainly be in regional areas because fulfilment is a lot harder in regional areas than in the cities. "We spoke to the guy rolling out Amazon's business here in Australia and in his words: 'We are going to destroy the retail environment in Australia.' " The fund manager has been told that Amazon sees enormous potential in Australia because it believes prices are way too high. Amazon's motto in relation to Australia is along the following lines: "Your margin is our opportunity." Are you wary about Amazon’s expansion in Australia? Written by Megan Levy. First appeared on <a href="http://www.stuff.co.nz/" target="_blank">Stuff.co.nz.</a>

Technology

Trust funds can work but you must be wary

As a child I remember my father saying that one pound put into a bank account for a newborn child and left to compound for 30 years would be worth some huge amount of money. I do not recall the number, but to my young ears it seemed some incredible sum of money - like a telephone number (although remember that telephone numbers were only four digits in those days). Whatever the actual numbers, we all know that a relatively small amount of money invested for a newborn baby will be worth a tidy and useful sum in 20 to 30 years. There are many of us who want to help their child or grandchild - we want to make a gift of money and use the miracle of compound interest to support the new little miracle of life. So, how do we go about this? After all, intent is one thing but the practicalities are quite another. While it may seem a simple thing to use the power of compound interest for the years a child is growing, when you really look at it, things are not that simple. The first difficulty is the ownership of the fund that is established. If the fund is in the child's name, on turning 18, the money becomes that child's. That may be fine - you may be perfectly happy for the child to take the money and buy a motorbike and have a big party, but the intent of putting aside some money is more usually for the child's education or to help with the deposit on a house. As an alternative, you may hold the money for the child, resolving to give this money at a certain age or circumstance (eg, first house or tertiary education). The difficulty with this is that in the absence of any legal document to the contrary, the funds that you hold for the child will be yours and deemed so in areas like tax, asset testing, Working For Families, insolvency etc. To resolve this you could establish a trust - but if you have not already established a trust there will be considerable expense for establishment and ongoing management and interest from the child's fund could be taxed at 33c. The second difficulty is the investment strategy. It is easy enough to set up a bank account in the child's name and to make contributions to it which will mean that the interest will be taxed at the child's own low rate. However, a simple bank account will give low returns. This is important: for an investment of 20 years or more, there should be a very high proportion of shares and property. To illustrate, a gift of $10,000 put into a simple bank account earning 3 per cent would be worth $18,000, but a growth portfolio earning 6 per cent would be worth $33,000. The third difficulty is tax. This is linked to the ownership of funds: if the donor (parent, grandparent etc) owns the fund, the returns are taxed as their income; if the child owns the fund, they are likely to be taxed at a much lower rate. So, given the desire to use the power of compound interest to give the child the best start, what should you do? Well, there are options, but none of them is perfect: first, you could simply open a bank account in the child's name (but, as shown, the lower returns will mean that compound interest is lower too). Third, you could establish some kind of trust for the child (but the costs of this mean that you will have to gift a good deal of money to make it worthwhile - and there are also difficult tax considerations). I do not have an easy answer to this. Your love for that new little speckle of life means that you want to help, but you have to recognise that, in a practical sense, using compound interest to give that help is not simple. You need to weigh all the factors and then choose the best (although probably imperfect) means of help for your family. Have you set up a trust fund? Written by Martin Hawes. First appeared on <a href="http://www.stuff.co.nz/" target="_blank">Stuff.co.nz</a>. Martin Hawes is an authorised financial adviser. A disclosure statement is available on request and free of charge, or can be found at martinhawes.com. This article is of a general nature and is not personalised financial advice.

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Why you need to be wary of eye floaters

Eye floaters are tiny specks, flecks or threads that seem to drift aimlessly in your field of vision. They are caused when tiny clumps form in the gel-like substance, called the vitreous humour, inside the eyeball. Floaters are more likely to develop with age as the vitreous humour pulls from the retina and begins to shrink, dissolving to a more watery and liquid centre. This separation can cause small undissolved gel particles to break off and form floaters of many different shapes and sizes. While irritating, floaters do not necessarily indicate anything is wrong. Most people learn to ignore them and floaters eventually tend to “settle” below line of sight. If they are troubling you, look up and down, and from side to side, to swish the vitreous humour and move the floater out of the way.When floaters are an emergencyIn most cases, floaters are normal and harmless. However, if there is a sudden increase in floaters or they are accompanied by light flashes, seek medical attention immediately.A shower of floaters and light flashes could indicate that your vitreous is pulling away from your retina. This is not sight-threatening and requires no treatment. However, it can also indicate that the retina itself, the eye’s light-sensitive tissue, has pulled away from its normal position at the inner back of the eye. When the retina is torn, the vitreous can push out the retina leading to the serious condition of retinal detachment. This should be considered a medical emergency as if left untreated, it can lead to visual impairment and blindness within a few days. Action must be taken as soon as possible so the retina can be reattached before vision is lost permanently.A study in the Journal of the American Medical Association found that the sudden presence of eye floaters and flashes means that one in seven people with these symptoms will have a retinal tear or detachment. And up to 50 per cent of people with a retinal tear will have a subsequent detachment.People who are very nearsighted, have diabetes, or who have had a cataract operation are more at risk.

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