Australia’s $911,000,000,000 Debt

[Value Collector]

You have it backwards and any cursory examination of market rates, even at the short end of the curve, across history, but even including as recently as 2021 when market rates forced the RBA to abandon any pretense that they can exert control over something as close to benchmark as the 3Y rate, would show how incorrect this is.

The market sets the price based on growth/inflation/liquidity expectations. The RBA and other Central Banks play in their little pool and follow the market rate when forced to. It has always been thus.

If what you said is true, none of the yield curves would look anything like they do today, including the literally unprecedented yield curve inversion in AU 10s/1s.

I am involved in the unlisted Asset back securities market, since you don’t think that interest rates affect the market value of fixed interest interest securities, I have some 3% 5 years I would love to sell you at face value, while I use that cash to go back and buy the 7% 5 years available today.

Trust me, everyone trading in fixed interest securities is looking at discounted cash flow, what you are talking about is anomalies that caused by the market making predictions and moving to safety etc.

But if you think discounted cashflow models aren’t used, you are just wrong, but I will leave this discussion now, it’s getting boring.

 

[InsvestoBoy]

I am involved in the unlisted Asset back securities market, since you don’t think that interest rates affect the market value of fixed interest interest securities, I have some 3% 5 years I would love to sell you at face value, while I use that cash to go back and buy the 7% 5 years available today.

Interest rates obviously affect the market value of fixed interest securities, but the rate that does the affecting is not the RBA cash rate.

Trust me, everyone trading in fixed interest securities is looking at discounted cash flow, what you are talking about is anomalies that caused by the market making predictions and moving to safety etc.

"anomalies"

But if you think discounted cashflow models aren’t used, you are just wrong, but I will leave this discussion now, it’s getting boring.

I never said anything about DCF not being used, have a nice day VC

 

[InsvestoBoy]

 

[Value Collector]

1. Interest rates obviously affect the market value of fixed interest securities,

Thank you for finally admitting that.

but the rate that does the affecting is not the RBA cash

If you don’t think wider interest rates are affected by the reserve banks, you need your head read.

Good day.

 

[aus_trader]

Just came across this video in an article. It's nothing new so we are all doing it in one way or another unless you are on the receiving side.

Err that sounds inappropriate, I meant we are all contributing in one way or another...



Don't mind paying taxes if it's a goddam reasonable percentage. Those percentages above look like day light robbery if you stare at them for a while to let it sink in...

 

[farmerge]

Just came across this video in an article. It's nothing new so we are all doing it in one way or another unless you are on the receiving side.

Err that sounds inappropriate, I meant we are all contributing in one way or another...

View attachment 156333

Don't mind paying taxes if it's a goddam reasonable percentage. Those percentages above look like day light robbery if you stare at them for a while to let it sink in...

Heeeeeelp I've got that sinking feeling looking at those percentages, 3 tiers of govt to support. I need a life bouy or a life line.

 

[sptrawler]

Just came across this video in an article. It's nothing new so we are all doing it in one way or another unless you are on the receiving side.

Err that sounds inappropriate, I meant we are all contributing in one way or another...

View attachment 156333

Don't mind paying taxes if it's a goddam reasonable percentage. Those percentages above look like day light robbery if you stare at them for a while to let it sink in...

You could always go back to 20 years before those tax brackets. ?

 

[Value Collector]

Just came across this video in an article. It's nothing new so we are all doing it in one way or another unless you are on the receiving side.

Err that sounds inappropriate, I meant we are all contributing in one way or another...

View attachment 156333

Don't mind paying taxes if it's a goddam reasonable percentage. Those percentages above look like day light robbery if you stare at them for a while to let it sink in...

It’s getting better soon, up to 200k will be limited to 30%

 

[InsvestoBoy]

Just came across this video in an article. It's nothing new so we are all doing it in one way or another unless you are on the receiving side.

Err that sounds inappropriate, I meant we are all contributing in one way or another...

View attachment 156333

Don't mind paying taxes if it's a goddam reasonable percentage. Those percentages above look like day light robbery if you stare at them for a while to let it sink in...

Sky News being Sky News as usual.

Consult the ATO website for a portrayal not designed to cause outrage.

I usually land in the top tax bracket, total tax is not much more than 30%. Last year was my highest gross ever, I paid 36.86%.

It's fine. Happy to pay it, happy Australian. Wish they would spend it on Australians and not HIMARS missiles, obsolete-on-arrival subs and F-35s.

 

[aus_trader]

It’s getting better soon, up to 200k will be limited to 30%
View attachment 156417

Good information @Value Collector, as always you post optimistic stuff

I hope they stick to this planned change of scale to bring some relief to the middle and upper class.

The figures posted by @sptrawler are mind boggling and I wasn't actually aware of 60% taxes. So take home pay would've been 40c for a $1 of hard slogging ?

 

[Value Collector]

Sky News being Sky News as usual.

Consult the ATO website for a portrayal not designed to cause outrage.

I usually land in the top tax bracket, total tax is not much more than 30%. Last year was my highest gross ever, I paid 36.86%.

It's fine. Happy to pay it, happy Australian. Wish they would spend it on Australians and not HIMARS missiles, obsolete-on-arrival subs and F-35s.

The 47% tax rate does bite, especially when looking at making those extra few investments that will add earnings to the top of the pile taxed at 47%.

For example, this time of year having already booked enough dividends and other profits to put me in the top tax bracket, if I look at taking on an option position it can be a bit hard to justify knowing that I am taking on a position where I am taking on all the risk, but any gain I make I lose 47% of it to tax.

Of course it doesn’t stop me investing, but there is no other way to look at it, those incremental earnings get smashed, and the lighter taxation of the first $100k or so doesn’t help at that point.

 

[InsvestoBoy]

The 47% tax rate does bite, especially when looking at making those extra few investments that will add earnings to the top of the pile taxed at 47%.

For example, this time of year having already booked enough dividends and other profits to put me in the top tax bracket, if I look at taking on an option position it can be a bit hard to justify knowing that I am taking on a position where I am taking on all the risk, but any gain I make I lose 47% of it to tax.

Of course it doesn’t stop me investing, but there is no other way to look at it, those incremental earnings get smashed, and the lighter taxation of the first $100k or so doesn’t help at that point.

Sounds approximately like how society should be functioning to me...if you want the 30% rate, move some equity to a corporation and take your risks there.

 

[sptrawler]

Good information @Value Collector, as always you post optimistic stuff

I hope they stick to this planned change of scale to bring some relief to the middle and upper class.

The figures posted by @sptrawler are mind boggling and I wasn't actually aware of 60% taxes. So take home pay would've been 40c for a $1 of hard slogging ?

Yes those were the days where a car loan was taken over 5 years.
From memory sparkies were on about $20k, so take home about $15k/year after tax. Bought my first brick house then, in a mortgage belt working class suburb called Yangebup, it cost $65k worth about $500k now.
Interest rates then 18%.

 

[frugal.rock]

Alf's perspective, US based.

"The Most Misunderstood Concept in Finance"

The Most Misunderstood Concept in Finance | Investing.com AU

Market Overview Analysis by Alfonso Peccatiello covering: . Read Alfonso Peccatiello's latest article on Investing.com Australia.

au.investing.com

 

[farmerge]

Yes those were the days where a car loan was taken over 5 years.
From memory sparkies were on about $20k, so take home about $15k/year after tax. Bought my first brick house then, in a mortgage belt working class suburb called Yangebup, it cost $65k worth about $500k now.
Interest rates then 18%.

Similar here sptrawler Bought our 1st home in what was Bedford Park then the Park bit was dropped. Cost us 50 years $22,500. Not too many of those 1/4 acre blocks left these days. Close to all amenities and the city with 3 bus services in close proximity. Wouldn't hazard a guess what the old place would be worth if we still owned it.

 

[Value Collector]

Similar here sptrawler Bought our 1st home in what was Bedford Park then the Park bit was dropped. Cost us 50 years $22,500. Not too many of those 1/4 acre blocks left these days. Close to all amenities and the city with 3 bus services in close proximity. Wouldn't hazard a guess what the old place would be worth if we still owned it.

I bought my first place back in 2001, it cost $218,000 my father was shocked that house prices had gone above $200k, he was equally shocked petrol had gone over 80cents / Litre

 

[tech/a]

Similar here sptrawler Bought our 1st home in what was Bedford Park then the Park bit was dropped. Cost us 50 years $22,500. Not too many of those 1/4 acre blocks left these days. Close to all amenities and the city with 3 bus services in close proximity. Wouldn't hazard a guess what the old place would be worth if we still owned it.

While we are reminiscing.

Started buying Property again seriously in 1996
Target was 4 bedrooms homes on 700+ Square meter blocks
Continued buying through to 2003 using increased equity to buy
more as they came up.
Finished with 10 ranging from 90K to 200k over that time. so total outlay was
approx 1.7 mill
Started selling in 2006 and stopped in 2013 freeholding 4 ----paying everything out and pocketing
around $400k Freehold property now around $4 mill rent roll $180K a year.

BUT
Had I kept all properties they would be worth around $8 mill with a rent roll of around $400K a year and loans of
around $1.5 mill.
Never in my wildest dreams did I think property prices would get to today's prices and will eventually be beyond.

There are a few things I've learned along the journey.

Hold Hold Hold
Never miss a buy for a few K because that last few K is the final decision.
I missed some massive opportunities for under $5k which eventually cost me $100s of K. (On each).
Cashflow is king.
Banks love bricks and mortar
Banks don't want your increased equity. Borrow as much as you can (I'm speaking strictly I.P's).
Markets change, people dont.

 

[farmerge]

I bought my first place back in 2001, it cost $218,000 my father was shocked that house prices had gone above $200k, he was equally shocked petrol had gone over 80cents / Litre

Wouldn't we love to see 80c a litre now !!!!

 

[aus_trader]

As for the previous comments and discussions with the ASF members on this thread, I was and am opposed to the very high taxes for the hard-working Aussies who are above average. I think taxes should be capped at low 30% range no matter how much you earn. I don't earn 7-figures but if someone does, they shouldn't be taxed to the max. If someone earns 10m then ~3m sucked out of him/her is plenty IMO. How much can be accomplished if those $3m of tax dollars can be effectively used to improve the community. Depends on how you look at it of course; it could only yield in 3 or less Mc mansions for the average politician, or it could yield in 10 or more small homes for the low-income earners or public housing. I hold this view of reasonable taxes for all because we all should be motivated to working hard, even towards earning 7-figure salaries.

However, this will shock the ASF community if you haven't seen already...

Sixty-six Australian millionaires paid no tax last year: ATO

www.9news.com.au

 

[sptrawler]

The thing is @aus_trader , if they know 66 millionaires didn't pay tax, they know who they are and with that they know how they did it.
So it doesn't sound like too difficult a loop hole to close IMO, if it is by paying stupid money to an accountant and then claiming the deduction. They only have to limit what can be claimed e.g a scheduled fee deduction, much like they do for Dr's with medicare, maybe those who can change things, don't want to change things.