Quote:
Originally Posted by xelasnave
It will be the last option that you list ...for many of our era the family home is regarded as the property of the family... And in some cases even money in the bank is treated as belonging to the heirs...I felt very guilty buying my astronomy gear because I felt it was wasting money that should go to my estate...I seem to have managed the guilt somehow and to go somewhat overboard 
The approach is best seen with farmers who mostly should sell up and live a decent life but its the family farm... grandfather owned it... Simply cant be sold.
Another chap up here .. he and his brother own 25,000 acres...even at $1000 an acre we are talking big money...sell it?..no never..they are fifth generation...they could make a much better living with the cash elsewhere..they could just live off the capital and leave a huge sum...and they work just so hard to generate income...both hate the place.
But tell me...how do you make 5% these days as I would really love to know.
Alex |
Hi Alex,
Managed funds make more than 5%. My Allocated Pension has made more than 5% for each of the last 10 years - tax free after age 60. It's a problem now as one can only put in $100,000 a year - though they let you put in three years worth initially, then another three years worth in three years time and so on. You can pick whether you want it in cash funds, share funds, overseas share funds, low risk diverse funds, moderate risk diverse funds. And when you need some money, just go on-line and fill out a form to withdraw it, and you have the money in your bank account in two or three days.
And the money doesn't have to come from superannuation to be deposited into it.
As for your struggling friend with a $2 million dollar house. It belongs to him - not to the family. When he and his spouse passes, it will usually go to multiple heirs who will sell it to split the proceeds.
If he's single, he can take out $180,000 as a reverse mortgage, put it in an allocated pension and still not affect the old age pension (or over $300,000 for a married couple). He can then elect to receive say an extra $9000 (5%) a year paid monthly ($15,000 for a married couple), and take extra cash out when he needs it for a say a vacation. When he passes away, the heirs still get a big chunk of cash to split.
If the family/heirs don't want him to do that because they want it all for themselves - I'd disinherit the selfish creatures, as they obviously wouldn't care too much about him.
Seriously - what's the point of being asset rich if one wants to act like a pauper?
In Melbourne some years back, it was known that some poor old age pensioners were living in $3 to $4 million dollar houses in Albert Park. My thoughts were - for heaven's sake - sell the place, buy a cheap $2 million dollar place a few suburbs away, and get a limo driver to take you to visit your friends in the old suburb.
Cheers,
Renato