Starting a family and its impacts on income

[kathryn d]

Adjust that for Canada for incomes, unless you're saying a nail technician earns as much as a school teacher for example .

And are you saying that ALL landlords in Canada make more money (net income) than many skilled and educated PAYE workers?

I can't speak for ALL landlords.
If you have the very modest number of properties like we have, and many in our area have even more than us, it would only take a few years to be ahead of a skilled and educated PAYE worker.
Remember we are not permitted to have NG properties here.

You still need to consider the expense of uni, which isn't cheap.

As I always say, it is never about how much you make, it is how much you keep.

 

[weg]

I can't speak for ALL landlords.
If you have the very modest number of properties like we have, and many in our area have even more than us, it would only take a few years to be ahead of a skilled and educated PAYE worker.
Remember we are not permitted to have NG properties here.

You still need to consider the expense of uni, which isn't cheap.

As I always say, it is never about how much you make, it is how much you keep.

Canada sounds very different then. Most PI here in Australia that are on minimum wage would take many many years of PI to create a net cashflow above the wages of someone with skills or a degree that gives them a income of around 100K.

Statistically very few would ever do it before retirement age, if ever, I would think.

I also don't know what uni costs there, but it's affordable here when you think how quickly it can be repaid.

My sons debt will be around 35K but his starting salary NOW would be around 70K and he could very easily be on 100K by age 25 (more later), and have that debt repaid.

Armed with the same investing skillset as the low income earner, my son would be streets ahead in the game - would retire earlier and probably have a better quaility of life along the way.

As Canada is very different to here it's probably pointless discussing this (and it's gone very OT), although still wondering if a nail technician would earn the same as a teacher??

 

[kathryn d]

As Canada is very different to here it's probably pointless discussing this (and it's gone very OT), although still wondering if a nail technician would earn the same as a teacher??

When my daughter checked it out, she would have made minimum wage, after spending 10-15K.
Teachers get paid according to their qualifications.My SIL took short summer courses for a few years, and increased her salary immensely.

 

[devank]

Yep I meant pre pay interest not tax, initially! Sorry!

Can one person alone pre-pay the interest?
Say together (mum & dad have equal share) they have $400K loan. That means each has $200K. Can the mother pay her share of interest in this financial year if she is going to have reduced income in next financial year?

 

[Terry_w]

Can one person alone pre-pay the interest?
Say together (mum & dad have equal share) they have $400K loan. That means each has $200K. Can the mother pay her share of interest in this financial year if she is going to have reduced income in next financial year?

Not if its a joint loan.

 

[stinadaze]

Re OP's PHI question- pays for the right to go to a private hospital and that's almost it. Our health policy has two $500 excesses and I was admitted for prenatal care a few weeks prior to our baby's birth so we were up for 1k just to walk in the hospital door. PHI gives a rebate to in-hospital items only for the majority of policies so nothing back for the obstetric fee. Medicare gave us $400 from a $2500 management fee. Fertility costs are not covered by PHI in most cases unless u go to a public hospital IVF clinic. As for in-hospital costs, we have $400 out of pocket for pathology tests and am yet to receive an anaethetist bill (for our first child we were $1200 out of pocket). Another thing is that your baby is not deemed to be an in-patient so PHI does not give any rebate on paediatrician fees -which will be charged to you for the one or two compulsory visits they make to your baby. Lastly some obs will bulk bill their fee to conduct a csection but others don't.

Thanks Beachgurl. Any experience others have had with PHI is extremely helpful! With management fee I’m assuming this is a private hospital fee correct? I have tried to look online to see what the public hospital in Campbelltown offers but nothing offical is available

re Prepaying interest, i guess if you prepay the full portion of interest then you know that you will not have any interest expense during the FY when the family will be on 1 income. could you partly pre pay the interest for a year? or do you have to pre pay a full year?

Jumping onto something else.... baby bonus. I read on a couple of places that “Income can be reduced for eligibility purposes by pre-paying interest on investment loans if appropriate, or by salary sacrificing to super.”

Is this right though? I thought they looked at gross income? Have I misunderstood? I thought that even super contributions would count towards assessable income

 

[evand]

Not true at all. Someone on $400k per year who spends $250k will have much more than someone on 100k and saves $60k.

As I always say, it is never about how much you make, it is how much you keep.

 

[evand]

I cant believe this ridiculous thread is still going. People have lots of kids and are wealthy and others have none and are poor.

Whether you have kids or not will will not determine your wealth.

If you're broke without kids you'll be broke with them. If you have the right mindset to make money with no kids, having them will not affect you and you'll still make money.

Crazy.

Thanks Beachgurl. Any experience others have had with PHI is extremely helpful! With management fee I’m assuming this is a private hospital fee correct? I have tried to look online to see what the public hospital in Campbelltown offers but nothing offical is available

re Prepaying interest, i guess if you prepay the full portion of interest then you know that you will not have any interest expense during the FY when the family will be on 1 income. could you partly pre pay the interest for a year? or do you have to pre pay a full year?

Jumping onto something else.... baby bonus. I read on a couple of places that “Income can be reduced for eligibility purposes by pre-paying interest on investment loans if appropriate, or by salary sacrificing to super.”

Is this right though? I thought they looked at gross income? Have I misunderstood? I thought that even super contributions would count towards assessable income

 

[kathryn d]

I cant believe this ridiculous thread is still going. People have lots of kids and are wealthy and others have none and are poor.

Whether you have kids or not will will not determine your wealth.

If you're broke without kids you'll be broke with them. If you have the right mindset to make money with no kids, having them will not affect you and you'll still make money.

Crazy.

For once, I agree with you !

 

[stinadaze]

I never said this was about creating wealth. i asked a question about dealing with finances under changing circumstances. as i said before, not necessarily how to budget, but also other aspects. it is quite a change to one's finances, so why not ask and be prepared for it if one can? even banks take it into perspective when lending you money so why should i not?

apologies for the ridiculous thread. I've still learnt a lot... from most posts anyway.

 

[beachgurl]

The management fee is charged by the obstetrician regardless of whether u go private or public. The private hospital stay is paid for by your PHI. Depending on your insurer and your policy you usually pay an excess and the insurer pays the rest.

 

[slammindan]

I cant believe this ridiculous thread is still going. People have lots of kids and are wealthy and others have none and are poor.

Whether you have kids or not will will not determine your wealth.

If you're broke without kids you'll be broke with them. If you have the right mindset to make money with no kids, having them will not affect you and you'll still make money.

Crazy.

I'd a thought it would be ridiculous NOT to ask yourself questions on how to prepare financially before your children arrive.

 

[kathryn d]

Fair enough, but I think most parents would want their kids to at least have a licence (I strongly encourage it), even if they don't have a car immediately, and would go as far as paying for this and whatever else may help them in the future.

A licence, skills (and a piece of paper) and a go get attitude can really make all the difference to choice of job and what you get paid. Why encourage them to take on the attitude that minimum wage is what they should strive for? I've encouraged the opposite and both want to invest (the 13yo has already invested savings).

I think enouraging kids to be in the best possible position to advance themselves, doesn't take away from investing or saving - they're two very different things.

Thought you'd be pleased to hear my youngest son has just purchased his first Honda 125cc motorbike on the weekend.
He is taking his written test on Wednesday, and then will be taking his driving instructions.
All this, without us nagging him. He even paid cash for the bike. He is 22 yrs old.
He decided when he was ready.
Since he can't really drive it in the snow, I expect a car will come next.