Territory Stories

The Northern Territory news Tue 2 Apr 2013



The Northern Territory news Tue 2 Apr 2013

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NT news


The Northern Territory news; NewspaperNT




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Community newspapers -- Northern Territory -- Darwin; Australian newspapers -- Northern Territory -- Darwin

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Nationwide News Pty. Limited

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Copyright. Made available by the publisher under licence.

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Nationwide News Pty. Limited



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www.ntnews.com.au Tuesday, April 2, 2013. NT NEWS. 27 P U B : NTNE-WS-DA-TE:2-APGE:27 CO-LO-R: C-M Y-K ntnews.com.aul l l l l l l l l l l l l l l l l l l l l l l l l l l l l l l l l l l l l l l l l l l l l l l l l l l l l l l l l l l l l l l l l l l l l l l l l l l l l l l l l l l l l l l l l l l l l l l l l l l l l l l l l l l l l l l l l l l l l l l l l l l l l l l l l l l l l l l l l l l l l l l l l l l l l l l l l l l l l l l l l l l l l l l l l l l l l l l l l l l l l l l l l l l l l l l l l l l l l l l l l l l l l l l l l l l l l l l l l l l l BUSINESS Getting back in the black is simply hard work HOUSEHOLDDEBT (% of all households) Mortgage 38.8% Credit card 37.4% Other loans 21.4% HECS/HELP debt 16.2% Car finance 13.6% Owed to family and friends 6.4% Hire purchase/store credit 3.4% Source: St GeorgeMelbourne Institute Theres really no magic to repaying what you owe, writes Anthony Keane FEWER Australians say they are debt-free, despite a drop in mortgages and other loans in the past three months. Forty per cent of households say they have no debt, down from 42.7 per cent in last years December quarter, according to research to be released this week by St George Bank and the Melbourne Institute. Wiping out consumer debts is vital, but other debt can help people build wealth. Debt doesnt always have to have negative connotations, St George chief economist Hans Kunnen says. He says the latest rise in debt could be a sign of increased confidence among households to spend and invest, a trend noted in the St George-Melbourne Institute Household Financial Conditions report. It also found almost 39 per cent of households say they have a mortgage, down from 42.4 per cent three months ago. Improved household financial conditions may have allowed some Australians to make greater contributions to their mortgages, and others to actually pay off their homes entirely, Kunnen says. Financial strategist Theo Marinis says good debt such as that used for property and share investment delivers income and tax deductions. It works if you can be reasonably sure that the asset will go up in value. Debt ratchets up the potential returns, but it also magnifies the losses and multiplies the downside, he says. Marinis says people can get on top of their consumer debts by paying down the highest-interest loans first (usually credit cards), using offset accounts with their mortgage, and simply avoiding borrowing too much. Wealth For Life Financial Planning principal Rex Whitford is also a fan of offset accounts, and says budgeting is critical for anyone wanting to be debt-free. Lessons learnt on the winding path to wealth David and Libby Koch say working out the family budget is key and coming back from adversity is one of the best financial lessons The road to riches is often long and bumpy one, writes Karina Barrymore ALL I ask is the chance to prove that money cant make me happy. British comedian Spike Milligan. Many of us might also hanker for the chance to see how happy money might make us but, according to the experts, its usually a long and steady climb, with many a setback along the way. Your Money sought out some of Australias leading finance minds to hear their best financial decisions and most valuable lessons learnt. Roger Mendelson, CEO of Prushka Debt Recovery: The best financial decision I ever made was to run my business without external debt. We are masters of our own destiny. Only expand when our resources allow it and you arent at the mercy of lenders. Craig James, CommSecs chief economist: The best financial decision I ever made was paying off our home loan. It gave us financial flexibility and peace of mind. Unfortunately we had to recently re-mortgage to pay school fees, but hopefully this debt will only be with us for a short time. Mark Rantall, CEO, Financial Planning Association: I learnt from bitter experience and personal loss that there are no short cuts to making money. Hard work, integrity and dogged persistence in investing when markets are high and markets are low through dollar cost averaging (continually investing regularly over the long term) is the best way to accumulate wealth. David Koch, finance commentator and Your Money columnist: My biggest financial lesson came from when I interviewed Gerry Harvey. He said: Kochie, youve never been in business until youve been to the brink, looked over the edge, seen what its like and worked your way back. At the time I just thought he was a grumpy old man . . . until it happened to me. You learn so much from adversity. Libby Koch, Your Money columnist: My biggest financial decision was deciding to have children young, staying at home to look after them and working out how to survive on one income. It was a very sobering exercise in putting together a family budget. Looking back, we learnt so much from that experience. Shane Oliver, AMP Capitals head of investment strategy: The best financial decision I ever made (with my wife) was to buy and negative gear a house with a huge mortgage that I found very scary in 1995 at a time when demand was non-existent, being in the middle of winter and with mortgage rates around 10.5 per cent. This was at the start of the last great property boom, so its now worth at least 3 times what we paid for it. Wealth Within fund manager and analyst Janine Cox: My mother was most influential in showing me that women can be financially independent through investing if they get the right knowledge in the sharemarket, and this eventually led me to my career as an invest ment analyst and fund manager. The second piece of advice came from a very resourceful uncle. He told me to think twice before entering into financial transactions with family because, when expectations dont match reality, families can be broken apart. MyBudget founder and director Tammy May: My best financial decision was to buy my first home when I was 20. It was a risk but at the time my rent was costing me $10 per week more than what my mortgage would. I bought an old deceased estate and slowly renovated it over time. It also kept me from wasting my money on the weekends because I had to be financially responsible and pay my mortgage. Mark Bouris, financier and Yellow Brick Road executive chairman: Always back yourself, no matter what. When you know something will work, you have to give it your all. Sometimes it doesnt work out exactly as planned but thats usually the best part, because it often works out for the better and you usually learn something. Peter Strong, executive director of the Council of Small Business Australia: My best financial decision was to follow the advice of a financial planner who re commended a range of longterm and short-term investments that matched my risk level. In the end the gains from the safer investments easily outweighed the losses from the speculative investments. It changed my risk profile to a much more conservative one. Real Estate Institute of Australia president Peter Bushby: Without exception the best advice was from my late father. As an experienced real estate agent, he knew the benefits of home ownership and believed that when I started earning I needed to be saving for a deposit. It is much better to pay off your own home than someone elses.