Search

What are ‘good’ and ‘bad’ debts, and which should I pay off first?

<a href="https://theconversation.com/profiles/angel-zhong-1204643">Angel Zhong</a>, <a href="https://theconversation.com/institutions/rmit-university-1063">RMIT University</a> With the cost of living soaring and many struggling to get a pay rise, it’s not surprising people are using debt to navigate life’s financial twists and turns. Owing money can sometimes feel challenging, but not all debts should keep you awake at night. So which debts are good and which are bad? And in what order should you pay them off? As it all depends on your personal circumstances, all I can offer is general information and not financial advice. Ideally, you should seek guidance from an accredited financial adviser. But in the meantime, here are some ideas to consider. <h2>What is a ‘good debt’?</h2> Good debts can be strategic tools and help build a solid foundation for your future. They usually increase your net worth by helping you generate income or buy assets that increase in value. With good debts, you usually get back more than what you pay for. They usually have lower interest rates and longer repayment terms. But personal finance is dynamic, and the line between good and bad debt can be nuanced. If not managed properly, even good debts can cause problems. Some examples of “good debts” might include: Mortgages: A mortgage allows you to buy a house, which is an asset that generally increases in value over time. You may potentially get tax advantages, such as <a href="https://www.ato.gov.au/forms-and-instructions/rental-properties-2023/other-tax-considerations">negative gearing</a>, through investment properties. However, it’s crucial not to overstretch yourself and turn a mortgage into a nightmare. As a rule of thumb, try avoid spending <a href="https://www.cnbc.com/select/mortgage-affordability/">more than 30% of your income</a> per year on your mortgage repayments. Student loans: Education is an investment in yourself. Used well, student loans (such as <a href="https://www.studyassist.gov.au/help-loans/hecs-help">HECS-HELP</a>) can be the ticket to a higher-paying job and better career opportunities. <h2>What is a ‘bad debt’?</h2> “Bad debts” undermine your financial stability and can hinder your financial progress. They usually come with high interest rates and short repayment terms, making them more challenging to pay off. They can lead to a vicious cycle of debt. Examples of bad debts include: Payday loans: A payday loan offers a quick fix for people in a financial tight spot. However, their steep interest rates, high fees and tight repayment terms often end up worsening a person’s financial problems. The interest and fee you may end up paying can get close to the loan amount itself. Credit card debt: Credit cards can be like quicksand for your finances. If you don’t pay off your purchase on time, you’ll be subject to an annual interest rate of around <a href="https://www.rba.gov.au/statistics/tables/">19.94%</a>. For a A$3,000 credit card debt, for example, that could mean paying nearly $600 annual interest. Carrying credit card debt from month to month can lead to a seemingly never-ending debt cycle. Personal loans: People usually take personal loans from a bank to pay for something special, such as a nice holiday or a car. They often come with higher interest rates, averaging around <a href="https://www.finder.com.au/personal-loans">10%</a>. Spending money that you don’t have can lead to prolonged financial headaches. Buy-now-pay-later services: Buy-now-pay-later services often provide interest-free instalment options for purchases. This can be tempting, but the account fees and late payment fees associated with buy-now-pay-later services can lead to a long-term financial hangover. The convenience and accessibility of buy-now-pay-later services can also make it easy to get further and further into debt. <h2>So in what order should I pay off my debts?</h2> There is no one right answer to this question, but here are three factors to consider. Prioritise high-interest debts: Start by confronting the debts with the highest interest rates. This typically includes credit card debt and personal loans. Paying off high-interest debts first can save you money and reduce your total debt faster. Negotiate interest rates or switch lenders: Don’t be shy. A simple call to your lender requesting a lower rate can make a significant difference. You may also take advantage of sign-on offers and refinancing your loan with a new lender. In the banking business, customers are not usually rewarded for their loyalty. Consider different repayment strategies: Choose a debt repayment strategy that aligns with your preferences. Some people get a psychological boost from paying off smaller debts first (this is often called the “<a href="https://www.wellsfargo.com/goals-credit/smarter-credit/manage-your-debt/snowball-vs-avalanche-paydown/#:%7E:text=The%20%22snowball%20method%2C%22%20simply,all%20accounts%20are%20paid%20off.">snowball method</a>”). Others focus on high-interest debts (often known as the “<a href="https://www.wellsfargo.com/goals-credit/smarter-credit/manage-your-debt/snowball-vs-avalanche-paydown/#:%7E:text=The%20%22snowball%20method%2C%22%20simply,all%20accounts%20are%20paid%20off.">avalanche method</a>”). Find what works for you. The most important thing is to have a plan and stick to it. Review the terms of each debt carefully. Certain loans offer flexibility in repayment schedules, while others may impose penalties for early settlement. Take note of these conditions as you develop your repayment plan. Debt can be a useful tool or a dangerous trap, depending on how you use it. By understanding the difference between good and bad debts, and by having a smart strategy for paying them off, you can take charge of your financial future.<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/217779/count.gif?distributor=republish-lightbox-basic" alt="The Conversation" width="1" height="1" /> <a href="https://theconversation.com/profiles/angel-zhong-1204643">Angel Zhong</a>, Associate Professor of Finance, <a href="https://theconversation.com/institutions/rmit-university-1063">RMIT University</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/what-are-good-and-bad-debts-and-which-should-i-pay-off-first-217779">original article</a>.

Money & Banking

Matthew Perry's huge net worth revealed

As the world <a href="https://www.oversixty.com.au/health/caring/you-were-loved-tributes-flow-over-tragic-passing-of-matthew-perry" target="_blank" rel="noopener">mourns the loss </a>of one of its beloved Friends stars, Matthew Perry, whose iconic portrayal of Chandler Bing left an indelible mark on fans worldwide, it's important to remember the legacy he leaves behind – a legacy encompassing not only his role in Friends but also his achievements in film, television, literature, real estate and more. While his presence will be missed, his work will continue to inspire and entertain fans for generations to come. Let's take a look at the legacy he leaves behind. The Friends Phenomenon Matthew Perry's fame skyrocketed when he became Chandler Bing on the hit sitcom in 1995. Initially earning US$35,000 per episode, <a href="https://www.oversixty.com.au/health/caring/so-utterly-devastated-friends-cast-break-silence" target="_blank" rel="noopener">Perry and his five co-stars</a> (Jennifer Aniston, Courtney Cox, Lisa Kudrow, David Schwimmer and Matt Le Blanc) rewrote history in 2002 when they negotiated a groundbreaking deal to earn US$1 million per episode during the show's final season. Each season consisted of 23 episodes, meaning that Perry made well over US$20 million for just one season. Over the course of the show's ten successful seasons, each cast member earned a staggering $141 million. To add to his wealth, Friends continues to be one of the most popular streaming series globally, guaranteeing the stars royalties of approximately $16 to $31 million annually. Even Warner Bros., the show's producer, reaps substantial profits, with an estimated $1.5 billion yearly from reruns. The 2021 Friends reunion special on HBO Max further contributed to Perry's financial success, with each principal cast member receiving $3.9 million. Film and Television Matthew Perry's talents extended beyond the realm of Friends. He starred in various film and television projects, including The Whole Nine Yards alongside Bruce Willis, Aaron Sorkin's Studio 60 on the Sunset Strip alongside West Wing alum Bradley Whitford, 17 Again, and The Odd Couple, where he also served as an executive producer. In his memoir, Perry disclosed that he negotiated his Studio 60 on the Sunset Strip salary from an initial offer of $79,000 per episode to $275,000 per episode. In the romantic comedy Fools Rush In (1997), he earned $1.57 million. Memoir Perry's memoir, titled Friends, Lovers, and the Big Terrible Thing: A Memoir, was released in November 2022. Despite a <a href="https://www.oversixty.com.au/health/caring/keanu-reeves-attacked-for-still-being-alive" target="_blank" rel="noopener">minor hiccup involving actor Keanu Reeves</a>, where he questioned why Reeves was still alive while others like River Phoenix and Heath Ledger had tragically passed, Perry's memoir received a warm reception. Perry swiftly apologised for the comment and promised to remove all mention of Reeves from future editions. It's rumoured that Perry secured a "seven-figure" book deal for the candid memoir, which is bound to generate significant earnings through book sales. Real Estate Ventures Perry also dabbled in real estate throughout his life. In 2011, he purchased a $17 million beachfront home in Malibu, later listing it for $23 million in 2020. Ultimately, the property sold in 2021 for $20 million. In 2015, Perry sold another Malibu home for $17 million. In 2017, he acquired a luxurious 40th-floor condo in Century City for $30 million. Two years later, he listed the condo for $46.4 million but eventually sold it in 2021 for $28.3 million, 38% less than the initial asking price. One of his most recent acquisitions was a $7.8 million Hollywood Hills home, purchased in June 2021. In 2020, Perry bought his Pacific Palisades residence, where he resided until his passing. This midcentury modern ranch-style home boasted four bedrooms, 3.5 bathrooms, a fire pit and a raised pool overlooking the ocean. Car Collection Apart from his real estate ventures, Perry was known for his impressive car collection. It included various luxury vehicles, such as a Lincoln Navigator, a BMW 6 Series Convertible, a BMW 7 Series sedan, a Porsche Panamera, and a Porsche 911 Carrera Convertible. He also owned a BMW Z8, an Aston Martin Vantage Convertible, a Porsche Taycan 4S, and an Audi R8 Spyder, each valued between $300,000 and $500,000. Perry's enduring legacy spans far beyond the confines of the Friends universe. His multifaceted career, literary contributions, and real estate ventures have solidified his status as an entertainment icon. While his presence will be missed, his work will continue to inspire and entertain fans for generations to come. Image: NBC

Money & Banking

5 signs your friend is struggling with serious debt

Money is always going to be a sensitive topic, and part of the reason for this is the fact that so many people willingly suffer in silence. But if you notice the warning signs, you have to take action. Here are five signs your friend is struggling with serious debt. 1. They keep cancelling plans Whether you’re talking about dinner, drinks or even just the occasional coffee, if your friend keeps cancelling plans (particularly if they didn’t have a reputation for doing so in the past) that could be a sign that they’re struggling with their finances. 2. Unopened bills If you’re visiting your friend’s home and you notice a pile of unopened bills, this is a classic sign of money troubles. Generally these bills are left unopened because the recipient does not want to see what’s inside, or deal with the monetary consequences. 3. Sudden changes in behaviour Does your friend seem more fidgety that usual? Do they become cagey or defensive when money matters are mentioned? Are they bitter when discussing other people’s spending habits? This could indicate stress about their own individual financial situation. 4. Ignoring calls and knocks on the door If you’ve been staying at your friend’s house and noticed a knock on the door or phone that’s been left unanswered on multiple occasions this could be a very bad sign. Often this is out of fear of dealing with a debt collector who could be on the other side. 5. Not adapting to changes in circumstances very well Lifestyle changes generally come with a change in financial circumstances, but if you’ve noticed a sign that your friend is living in the same way that may be a sign that they’re ignoring the demands of their new situation and not putting themselves in a position to succeed. What can I do? Experts recommend taking the following steps if you know a friend who is struggling to deal with debt. That being said, sometimes just providing someone to talk to about it can make all the difference. <ul> <li>Encourage them to talk to their credit provider and discuss payment options.</li> <li>Talk about applying or a hardship variation to help make payments.</li> <li>Direct them to a financial counselling service.</li> <li>Encourage them to take up free legal advice.</li> </ul> Image credits: Getty Images

Money & Banking

Forcing people to repay welfare ‘loans’ traps them in a poverty cycle – where is the policy debate about that?

<a href="https://theconversation.com/profiles/hanna-wilberg-1466649">Hanna Wilberg</a>, <a href="https://theconversation.com/institutions/university-of-auckland-1305">University of Auckland</a> The National Party’s <a href="https://www.1news.co.nz/2023/09/26/more-sanctions-for-unemployed-beneficiaries-under-national/">pledge to apply sanctions</a> to unemployed people receiving a welfare payment, if they are “persistently” failing to meet the criteria for receiving the benefit, has attracted plenty of comment and <a href="https://www.1news.co.nz/2023/09/26/nationals-benefit-sanctions-plan-cruel-dehumanising-greens/">criticism</a>. Less talked about has been the party’s promise to index benefits to inflation to keep pace with the cost of living. This might at least provide some relief to those struggling to make ends meet on welfare, though is not clear how much difference it would make to the current system of indexing benefits to wages. In any case, this alone it is unlikely to break the cycle of poverty many find themselves in. One of the major drivers of this is the way the welfare system pushes some of the most vulnerable people into debt with loans for things such as school uniforms, power bills and car repairs. The government provides one-off grants to cover benefit shortfalls. But most of these grants are essentially loans. People receiving benefits are required to repay the government through weekly deductions from their normal benefits – which leaves them with even less money to survive on each week. With <a href="https://www.stuff.co.nz/pou-tiaki/132980318/auckland-mother-serves-up-cereal-for-dinner-due-to-rising-food-costs">rising costs</a>, the situation is only getting worse for many of the 351,756 New Zealanders <a href="https://figure.nz/chart/TtiUrpceJruy058e-ITw010dHsM6bvA2a">accessing one of the main benefits</a>. <h2>Our whittled down welfare state</h2> Broadly, there are three levels of government benefits in our current system. The main benefits (such as jobseeker, sole parent and supported living payment) <a href="https://www.workandincome.govt.nz/products/benefit-rates/benefit-rates-april-2023.html">pay a fixed weekly amount</a>. The jobseeker benefit rate is set at NZ$337.74 and sole parents receive $472.79 a week. Those on benefits have access to a second level of benefits – weekly supplementary benefits such as an <a href="https://www.workandincome.govt.nz/products/a-z-benefits/accommodation-supplement.html">accommodation supplement</a> and other allowances or tax credits. The third level of support is one-off discretionary payments for specific essential needs. Those on benefits cannot realistically make ends meet without repeated use of these one-off payments, unless they use assistance from elsewhere – such as family, charity or borrowing from loan sharks. This problem has been building for decades. <h2>Benefits have been too low for too long</h2> In the 1970s, the <a href="https://mro.massey.ac.nz/handle/10179/12967">Royal Commission on Social Security</a> declared the system should provide “a standard of living consistent with human dignity and approaching that enjoyed by the majority”. But Ruth Richardson’s “<a href="https://www.stuff.co.nz/the-press/christchurch-life/124978983/1991-the-mother-of-all-budgets">mother of all budgets</a>” in 1991 slashed benefits. Rates never recovered and today’s <a href="https://www.1news.co.nz/2022/03/29/benefit-increases-will-still-leave-families-locked-in-poverty/">benefits are not enough to live on</a>. In 2018, the <a href="https://www.weag.govt.nz/">Welfare Expert Advisory Group</a> looked at how much money households need in two lifestyle scenarios: bare essentials and a minimum level of participation in the community, such as playing a sport and taking public transport. The main benefits plus supplementary allowances did not meet the cost of the bare essentials, let alone minimal participation. The Labour government has since <a href="https://www.beehive.govt.nz/release/government-delivers-income-increases-over-14-million-new-zealanders">increased benefit rates</a>, meaning they are now slightly above those recommended by the advisory group. But those recommendations were made in 2019 and don’t take into account the <a href="https://www.stats.govt.nz/news/annual-inflation-at-6-0-percent">sharp rise in inflation</a> since then. Advocacy group <a href="https://fairerfuture.org.nz/">Fairer Future</a> published an updated assessment in 2022 – nine out of 13 types of households still can’t meet their core costs with the current benefit rates. <h2>How ‘advances’ create debt traps</h2> When they don’t have money for an essential need, people on benefits can receive a “special needs grant”, which doesn’t have to be repaid. But in practice, Work and Income virtually never makes this type of grant for anything except food and some other specific items, such as some health travel costs or emergency dental treatment. For <a href="https://www.1news.co.nz/2023/02/27/very-stressful-beneficiary-says-he-cant-afford-msd-debt/">all other essential needs</a> – such as school uniforms, car repairs, replacing essential appliances, overdue rent, power bills and tenancy bonds – a one-off payment called an “advance” is used. Advances are loans and have to be paid back. There are several issues with these types of loans. First, people on benefits are racking up thousands of dollars worth of debts to cover their essential needs. It serves to trap them in financial difficulties for the foreseeable future. As long as they remain on benefits or low incomes, it’s difficult to repay these debts. And the <a href="https://www.legislation.govt.nz/act/public/2018/0032/latest/whole.html">Social Security Act 2018</a> doesn’t allow the Ministry of Social Development (MSD) to waive debts. <h2>Contradictory policies</h2> Another problem is that people on benefits have to start repaying their debt straight away, with weekly deductions coming out of their already limited benefit. Each new advance results in a further weekly deduction. Often these add up to $50 a week or more. MSD policy says repayments should not add up to more than $40 a week, but that is often ignored. This happens because the law stipulates that each individual debt should be repaid in no more than two years, unless there are exceptional circumstances. Paying this debt off in two years often requires total deductions to be much higher than $40. The third issue is that one-off payments can be refused regardless of the need. That is because there are two provisions pulling in opposite directions. On the one hand the law says a payment should be made if not making it would cause serious hardship. But on the other hand, the law also says payments should not be made if the person already has too much debt. People receiving benefits and their case managers face the choice between more debt and higher repayments, or failing to meet an essential need. <h2>Ways to start easing the burden</h2> So what is the fix? A great deal could be achieved by just changing the policies and practices followed by Work and Income. Case managers have the discretion to make non-recoverable grants for non-food essential needs. These could and should be used when someone has an essential need, particularly when they already have significant debt. Weekly deductions for debts could also be automatically made very low. When it comes to changing the law, the best solution would be to make weekly benefit rates adequate to live on. The government could also make these benefit debts similar to student loans, with no repayments required until the person is off the benefit and their income is above a certain threshold. However we do it, surely it must be time to do something to fix this poverty trap.<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/212528/count.gif?distributor=republish-lightbox-basic" alt="The Conversation" width="1" height="1" /> <a href="https://theconversation.com/profiles/hanna-wilberg-1466649">Hanna Wilberg</a>, Associate professor - Law, <a href="https://theconversation.com/institutions/university-of-auckland-1305">University of Auckland</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/forcing-people-to-repay-welfare-loans-traps-them-in-a-poverty-cycle-where-is-the-policy-debate-about-that-212528">original article</a>.

Money & Banking

Too big, too heavy and too slow to change: road transport is way off track for net zero

<a href="https://theconversation.com/profiles/robin-smit-594126">Robin Smit</a>, <a href="https://theconversation.com/institutions/university-of-technology-sydney-936">University of Technology Sydney</a> The need to cut the emissions driving climate change is urgent, but it’s proving hard to decarbonise road transport in Australia. Its share of the nation’s total greenhouse gas emissions <a href="https://ageis.climatechange.gov.au/">doubled</a> from 8% in 1990 to 16% in 2020. New vehicles sold in Australia have <a href="https://theconversation.com/we-thought-australian-cars-were-using-less-fuel-new-research-shows-we-were-wrong-122378">barely improved</a> average emissions performance for the last decade or so. The federal government <a href="https://www.dcceew.gov.au/climate-change/publications/australias-emissions-projections-2022">publishes</a> emission forecasts to 2035 – 15 years short of 2050, the net-zero target date. Our <a href="https://www.transport-e-research.com/_files/ugd/d0bd25_7a6920bdd9e8448385863a7c23ec9ecf.pdf">newly published study</a> forecasts road transport emissions through to 2050. The estimated reduction by 2050, 35–45% of pre-COVID levels in 2019, falls well short of what’s needed. Our findings highlight three obstacles to achieving net zero. These are: Australia’s delay in switching to electric vehicles; growing sales of large, heavy vehicles such as SUVs and utes; and uncertainties about hydrogen as a fuel, especially for freight transport. These findings point to policy actions that could get road transport much closer to net zero. <h2>How was this worked out?</h2> Emissions and energy use vary from vehicle to vehicle, so reliable forecasting requires a detailed breakdown of the on-road fleet. Our study <a href="https://www.transport-e-research.com/software">used</a> the Australian Fleet Model and the net zero vehicle emission model (n0vem). The study focused on so-called <a href="https://www.cummins.com/news/2022/05/26/well-wheel-emissions-simplified">well-to-wheel emissions</a> from fuel production, distribution and use while driving. These activities account for about 75–85% of vehicle emissions. (<a href="https://theconversation.com/how-climate-friendly-is-an-electric-car-it-all-comes-down-to-where-you-live-179003">Life-cycle assessment</a> estimates “cradle-to-grave” emissions, including vehicle manufacture and disposal.) Working with European Union colleagues, our emissions simulation drew on an updated <a href="https://www.transport-e-research.com/_files/ugd/d0bd25_7a6920bdd9e8448385863a7c23ec9ecf.pdf">EU scenario</a> (EU-27) showing the changes in the EU vehicle fleet needed to meet the latest (proposed) CO₂ targets. Our study assumed Australia will be ten years behind the EU across all vehicle classes. We further modified the scenario to properly reflect Australian conditions. For instance, the EU has a much higher proportion of plug-in hybrid vehicles than Australia, where buyers are now bypassing them for wholly electric vehicles. <h2>Energy use is shifting, but too slowly</h2> Using this modified scenario, the simulation produces a forecast fall in total wheel-to-wheel emissions from Australian transport from 104 billion tonnes (Mt) in 2018 to 55-65Mt in 2050. Within the range of this 35–45% reduction, the outcome depends largely on the balance of renewable and fossil-fuel energy used to produce hydrogen. The modelling nonetheless predicts a large shift in energy use in road transport in 2050, as 2019 was basically 100% fossil fuels. The on-road energy efficiency of battery electric vehicles is roughly twice that of fuel cell electric (hydrogen) vehicles and roughly three times that of fossil-fuelled vehicles of similar type. The modelling results make this clear. In 2050, battery electric vehicles account for about 70% of total travel, but 25% of on-road energy use and only about 10% of total emissions. In contrast, fossil-fuelled vehicles account for about 25% of total travel in 2050, 60% of energy use and 75-85% of emissions. That’s even allowing for expected efficiency improvements. This means the shift to a mostly electric fleet by 2050 plus the use of hydrogen is predicted to fall short of what’s needed to get to net zero. It will require aggressive new policies to increase the uptake of electric vehicles across all classes. <h2>Lighter vehicles make a big difference</h2> But that is not the whole story. One neglected issue is the growing proportion of <a href="https://theconversation.com/we-may-be-underestimating-just-how-bad-carbon-belching-suvs-are-for-the-climate-and-for-our-health-190743">big, heavy passenger vehicles</a> (SUVs, utes). This trend is very noticeable in Australia. The laws of physics mean heavier vehicles need much more energy and fuel per kilometre of driving, and so produce more emissions. Currently, a large diesel SUV typically emits a kilogram of CO₂ for every 3 kilometres of driving, compared to 15km for a light electric vehicle and 200 kilometres for an e-bike. An average electric vehicle currently emits 1kg of CO₂ every 7km. This distance is expected to be around 60km in 2050, when renewables power the electricity grid. A lightweight electric car will more than double the distance to 125km per kilogram of CO₂. Reducing vehicle weights and optimising energy efficiency in transport will be essential to meet emission targets. The study modelled the impacts of <a href="https://www.automotiveworld.com/special-reports/vehicle-lightweighting-2/">lightweighting</a> passenger vehicles while keeping buses and commercial vehicles the same. If Australians had driven only small cars in 2019 for personal use, total road transport emissions would have been about 15% lower. The reduction in emissions from simply shifting to smaller cars is <a href="https://www.dcceew.gov.au/climate-change/publications/national-greenhouse-accounts-2019/national-inventory-report-2019">similar to</a> emissions from domestic aviation and domestic shipping combined. Importantly, lightweighting cuts emissions for all kinds of vehicles. <h2>The uncertainties about hydrogen</h2> Fuel cell electric vehicles using hydrogen account for only a few percent of all travel, but most will likely be large trucks. As a result, in our scenarios, they use a little over 10% of total on-road energy and produce 5-20% of total emissions, depending on the energy source used for hydrogen production and distribution. The modified EU scenario includes a significant uptake of hydrogen vehicles by 2050. That’s by no means guaranteed. The uptake in Australia has been negligible to date. That’s due to costs (vehicle and fuel), the need for new hydrogen fuel infrastructure, less mature technology (compared to battery electric vehicles) and limited vehicle availability. <a href="https://theconversation.com/we-must-rapidly-decarbonise-transport-but-hydrogens-not-the-answer-166830">Unresolved aspects</a> of hydrogen in transport include lower energy efficiency, the <a href="https://theconversation.com/for-australia-to-lead-the-way-on-green-hydrogen-first-we-must-find-enough-water-196144">need for clean water</a>, uncertainty about leakage, fuel-cell durability and value for consumers. <h2>How do we get back on track?</h2> Our study suggests Australia is on track to miss the net-zero target for 2050 mainly because of the large proportions of fossil-fuelled vehicles and large and heavy passenger vehicles. These two aspects could become targets for new policies such as public information campaigns, tax incentives for small, light vehicles, bans on selling fossil fuel vehicles and programs to scrap them. Other options to cut emissions include measures to reduce travel demand, optimise freight logistics and shift travel to public transport, to name a few. The study confirms the scale of the challenge of decarbonising road transport. Australia will need “all hands on deck” – government, industry and consumers – to achieve net zero in 2050.<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/208655/count.gif?distributor=republish-lightbox-basic" alt="The Conversation" width="1" height="1" /> <a href="https://theconversation.com/profiles/robin-smit-594126">Robin Smit</a>, Adjunct Associate Professor, <a href="https://theconversation.com/institutions/university-of-technology-sydney-936">University of Technology Sydney</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/too-big-too-heavy-and-too-slow-to-change-road-transport-is-way-off-track-for-net-zero-208655">original article</a>.

Travel Trouble

King Charles’ eye-watering net worth revealed

The royal family’s net worth has always been up for speculation, but The Times has analysed the King’s various income streams and unveiled the King’s personal net worth. King Charles reportedly has a personal net worth of £600 million or around $1.1 billion. The King’s fortune surpasses the late Queen’s net wealth of £370 million or $684 million, by more than double the amount. A former aide told The Times that King Charles had managed to accumulate a significant net wealth over the years following his costly divorce from Princess Diana in 1996 - where he paid her a $31 million lump sum and $740,000 annual salary. “He became prudent at tucking away some money from the Duchy [of Cornwall] after that wipe-out [of capital],” said the source. The duchy is where most of King Charles’ income comes from. There are two duchies in the UK, the Duchy of Lancaster and the Duchy of Cornwall. Both of these property empires primarily invest in land. King Charles inherited the Duchy of Lancaster following his mother’s death last September, and Prince William is now in charge of overseeing the Duchy of Cornwall, which is estimated to be worth $1.8 billion. When King Charles was in charge of overseeing the Duchy of Cornwall, he had increased its annual profits by 42.6 per cent to $47 million between 2011-2022. He made $393.6 million from the duchy in that time period, which isn’t liable to tax, though King has been voluntarily paying income tax since 1993. A lot of the revenue comes from “renting commercial properties” from other parts of the UK according to The Times. The Duchy of Lancaster has $1.2 billion of net assets, and although the royal in charge of overseeing the duchies are not allowed to sell the assets, they can keep the annual revenue. Sandringham and Balmoral are a couple of other income streams for King Charles, with an estimated value of $453 million for Sandringham and $388 million for the Balmoral castle and its estate. Image: Getty

Money & Banking

Don’t let financial shame be your ruin: open conversations can help ease the burden of personal debt

Nearly <a href="https://www.ipsos.com/en-nz/19th-ipsos-new-zealand-issues-monitor">two-thirds of New Zealanders</a> are worried about the cost of living, and a quarter are worried about <a href="https://www.canstar.co.nz/wp-content/uploads/2023/03/Consumer-Pulse-Report-NZ-2023-Final-4.pdf">putting food on the table</a>. But the <a href="https://visionwest.org.nz/food-hardship-part-one/">shame</a> that can come with financial stress is preventing some people from seeking help. According to a recent survey, a third of New Zealanders were not completely truthful with their family or partners about the state of their finances, and 12% <a href="https://www.stuff.co.nz/business/money/129477493/financial-infidelity-research-finds-kiwis-hiding-debts-from-their-partners">actively hid their debt</a>. This shame and worry about money can spill over into <a href="https://www.nzherald.co.nz/bay-of-plenty-times/news/concerns-buy-now-pay-later-schemes-could-fuel-addiction-as-kiwis-spend-17b-last-year/VOV3VIDIG2MZBGJEGPMLGWDMJI/">addiction</a>, <a href="https://www.newsroom.co.nz/i-had-serious-concussion-bad-credit-and-15000-debt-abuse-survivor">violence</a> and <a href="https://corporate.dukehealth.org/news/financial-strains-significantly-raise-risk-suicide-attempts">suicide</a>. Considering the effect of financial stress on our wellbeing, it is clear we need to overcome the financial stigma that prevents us from getting help. We also <a href="https://www.apa.org/topics/money/family-financial-strain">owe it to our kids</a> to break the taboo around money by communicating our worries and educating them on how to manage finances better. <h2>The burden of growing debt</h2> <a href="https://www.stuff.co.nz/business/money/300817697/mortgage-pain-homeowners-facing-repayment-hikes-of-up-to-900-a-fortnight">Ballooning mortgage repayments</a> are compounding the financial distress of many New Zealanders. At the beginning of 2023, an estimated 11.9% of home owners were behind on loan payments, with more than <a href="https://www.rnz.co.nz/news/business/485045/data-shows-430-000-new-zealanders-behind-in-credit-repayments-in-january">18,400 mortgagees in arrears</a>. <div data-id="17"> </div> Given the <a href="https://www.treasury.govt.nz/publications/an/an-21-01-html">majority of household wealth</a> in New Zealand is in property, our financial vulnerability is closely linked to the ebbs and flows of the <a href="https://content.knightfrank.com/research/84/documents/en/global-house-price-index-q2-2021-8422.pdf">second most overinflated property market</a> in the world. There are also cultural reasons for growing financial distress. Many households have taken on significant debt to “<a href="https://www.stuff.co.nz/business/7616361/Keeping-up-with-the-Joneses">keep up with the Joneses</a>” and to pursue the quintessential <a href="https://www.interest.co.nz/property/99890/westpac-commissioned-survey-suggests-many-new-zealanders-still-pine-quarter-acre">quarter-acre dream</a>. Social comparison and peer pressure act as powerful levers contributing to problem debt and over-indebtedness. The average household debt in New Zealand is more than <a href="https://tradingeconomics.com/new-zealand/households-debt-to-income">170% of gross household income</a>. That is higher than the United Kingdom (133%), Australia (113%) or Ireland (96%). <h2>The rise of problem debt</h2> And we are digging a deeper hole. Over the past year, <a href="https://www.rnz.co.nz/news/business/485045/data-shows-430-000-new-zealanders-behind-in-credit-repayments-in-january">demand for credit cards increased by 21.7%</a>. The use of personal debt such as personal loans and deferred payment schemes <a href="https://www.nzherald.co.nz/business/demand-for-personal-credit-rises-arrears-also-up-as-cost-of-living-bites/YCEM74CII5FQBPJXO3UOG4Y3GY/">is also climbing</a>. There is a real risk this debt could become problem debt. Problem debt can have severe and wide-reaching consequences, including <a href="https://theconversation.com/over-300-000-new-zealanders-owe-more-than-they-own-is-this-a-problem-173497">housing insecurity</a>, <a href="http://www.socialinclusion.ie/publications/documents/2011_03_07_FinancialExclusionPublication.pdf">financial exclusion</a> (the inability to access debt at affordable interest rates), <a href="https://www.tandfonline.com/doi/full/10.1080/07409710.2012.652016?journalCode=gfof20">poor food choices</a> and a plethora of <a href="https://bmcpublichealth.biomedcentral.com/articles/10.1186/1471-2458-14-489">health problems</a>. Yet, the hidden <a href="https://spssi.onlinelibrary.wiley.com/doi/10.1111/sipr.12074">psychological</a> and <a href="https://link.springer.com/article/10.1007/s11205-008-9286-8">social cost of financial distress</a>remains often unspoken, overlooked and underestimated. Even before the pandemic, <a href="https://www.scoop.co.nz/stories/BU1909/S00616/research-shows-financial-stress-impacts-mental-wellbeing.htm">69% of New Zealanders were worried</a>about money. The share of people worrying about their financial situation was higher for women (74%), and particularly women aged 18-34 (82%). It is no coincidence that the latter are particularly at risk of problem debt through so-called <a href="https://acfr.aut.ac.nz/__data/assets/pdf_file/0008/691577/Gilbert-and-Scott-Study-2-Draft-v10Sept2022.pdf">“buy now, pay later” schemes</a>. The stigma of financial distress extends beyond the vulnerable and the marginalised in our society. A growing number of <a href="https://www.rnz.co.nz/news/political/467417/middle-income-families-hoping-for-help-in-budget-as-rising-costs-sting">middle-class New Zealanders </a> are quietly suffering financial distress, isolated by financial stigma and the taboos around discussing money. When pressed, one in two New Zealanders would rather <a href="https://www.scoop.co.nz/stories/BU2203/S00384/research-shows-wed-rather-talk-about-politics-than-our-finances.htm">talk politics over money</a>. <h2>Time to talk about money</h2> Navigating financial distress and <a href="https://digitalcommons.law.seattleu.edu/cgi/viewcontent.cgi?article=2526&context=sulr">stigma</a> can feel overwhelming. Where money is a taboo subject, it may feel safer to withdraw, maintain false appearances, be secretive or shun social support. This tendency to avoid open discussions and suffer in silence can lead to <a href="https://loneliness.org.nz/lonely/at-home/financially-struggling/">feelings of isolation</a> and contribute to <a href="https://theconversation.com/how-financial-stress-can-affect-your-mental-health-and-5-things-that-can-help-201557">poor mental health</a>, such as depression, anxiety and emotional distress. Sadly, the trauma of living in financial distress can also <a href="http://irep.ntu.ac.uk/id/eprint/39442/1/1307565_Wakefield.pdf">break up families</a>. Losing the symbols of hard-gained success and facing the prospect of a reduced lifestyle can be tough. It often triggers feelings of personal failure and self doubt that deter us from taking proactive steps to talk openly and seek help. But what can families do to alleviate some of this distress? <h2>Seek help</h2> First, understand that <a href="https://www.ft.com/content/86767aac-98e0-4dae-8c5a-d3301b030703">you are not alone</a>. Over 300,000 New Zealanders <a href="https://theconversation.com/over-300-000-new-zealanders-owe-more-than-they-own-is-this-a-problem-173497">owe more than they earn</a>. Second, seek help. There are many services that help people work through their financial situation and formulate a plan. In the case of excessive debts, debt consolidation or <a href="https://goodshepherd.org.nz/debtsolve/">debt solution loans</a> may help reduce the overall burden and simplify your financial situation. For those struggling with increasing interest on their mortgages, reaching out to your bank early is critical. During the 2008 recession, banks in New Zealand <a href="https://www.beehive.govt.nz/release/banks-exchange-letters-crown-support-distressed-mortgage-borrowers">worked with customers</a> to avoid defaulting on mortgages, including reducing servicing costs, capitalising interest and moving households to interest-only loans. It is essential to understand that the <a href="https://www.stuff.co.nz/life-style/homed/real-estate/130677426/are-we-on-the-brink-of-a-wave-of-mortgagee-sales">banks do not want mortgagees to fail</a>, and that options exist. To help future generations avoid debt traps, we need open communication about money – also known as “<a href="https://link.springer.com/article/10.1007/s10834-020-09736-2">financial socialisation</a>”. This includes developing values, sharing knowledge and promoting behaviours that help build <a href="https://files.eric.ed.gov/fulltext/EJ1241099.pdf">financial viability and contribute to financial wellbeing</a>. The lessons about handling money from family and friends are crucial for <a href="https://www.frontiersin.org/articles/10.3389/fpsyg.2020.02162/full">improving our children’s financial capability</a>, helping them be <a href="https://www.fsc.org.nz/it-starts-with-action-theme/growing-financially-resilient-kids">more financially resilient</a> and better able to survive the stresses we are experiencing now – and those <a href="https://www.stuff.co.nz/business/money/300836616/heres-how-much-household-costs-are-expected-to-increase">yet to come</a>. Image credits: Getty Images This article originally appeared on <a href="https://theconversation.com/dont-let-financial-shame-be-your-ruin-open-conversations-can-help-ease-the-burden-of-personal-debt-202496" target="_blank" rel="noopener">The Conversation</a>.

Retirement Income

What to do when your friend owes you a few

We all want to do our bit to help our friends and family, and we’ve all heard that all too familiar “I’ll pay you back later”. But what do you do when later never seems to come around? According to a new report by finder, 1 in 4 Australians are waiting on a friend to pay them back. The numbers account for roughly 24% of the population, or 4.8 million people. Though the problem is by no means limited to the nation. The most common unpaid debts (all at 6%) fall under the categories of gifts, bill splitting at a restaurant, and event tickets. Sharing ride services (Uber, taxis, etc.), travel expenses, and gambling activities are close behind - making up 5, 4, and 3% of the reasons for lax repayments respectively. "Our research reveals that millions of Aussies have borrowed money from their friends with no intention of paying them back,” Finder’s money expert Sarah Megginson said of their findings. "Not repaying money breaks trust and can put strain on the relationship, but it could also cause financial problems for the friend left shouldering the debt." There is, however, hope for those still clutching their receipts and waiting, with Megginson sharing some top tips to help people get back what they loaned out. "Your first port of call should be to ask your friend to repay the debt,” she said. “It can be a bit uncomfortable bringing up the topic of money but if you don't ask and then you're resentful, that can be more damaging to the friendship long-term.” She then explained how you may have to avoid paying for them in the future, and that re-setting boundaries with some of the people in your life would be of benefit to both parties, as well as having an honest conversation with them about it all. However, if the situation is more serious than a taxi ride or a friendly brunch, further action may be necessary, especially if a large amount of money is involved. "You can send a letter of demand, clearly outlining how much you are owed and asking that it be repaid within a certain time frame,” she suggested of the worst-case scenario, “otherwise legal action will be started. "If you receive no response you can lodge a claim with your state or territory's tribunal for resolving matters like this.” Megginson added that above else it is important to “exercise discretion” when loaning money, even to family and friends. Emergency funds, in particular, should not be touched by anyone but yourself, as every dollar counts in the midst of a cost of living crisis. Images: Getty

Money & Banking

"I had better make sure I don’t have a heart attack!": Allison Langdon stuns pensioners on the verge of bankruptcy

Left with a $25,000 legal bill after taking their retirement village to court over a broken air conditioning unit and losing the case, pensioners Walter and Carola Sadlo were on the verge of bankruptcy. In a heartwarming segment, Allison Langdon told the Sadlo’s that A Current Affair viewers had banded together to bail them out of their financial debt. Walter and Carola’s legal battle began in 2018 when their air conditioning unit broke. The couple had paid an extra $1,375 for air conditioning but maintenance wasn’t covered by the retirement village. Walter said he believed it would be covered, so he tried to fight it in the New South Wales Civil and Administrative Tribunal (NCAT). After taking the retirement village to court and losing the case, the couple were issued with a bankruptcy notice just two days before Christmas. “I could not believe that somebody could be so vicious and cruel,” Walter said. The couple had also sacrificed their savings to fight the case; $15,000 that Carola inherited from her mother. With this gone, they feared losing their home. Langdon then stunned the couple by telling them, “our viewers have paid your debt.” "I normally don't get emotional. I had better make sure I don't have a heart attack!" Walter said. Not only was their $25,000 legal bill covered, but viewers chipped in almost enough to cover the $15,000 they had to put toward their bill. "Hopefully, there will be village operators who see this story and will show a bit more heart," Walter said. Image: A Current Affair

Money & Banking

"Sheer terror": Pensioner slapped with five-figure government fine

Pensioner Rosemary Gay opened up about the “sheer terror” she faced upon receiving a letter from the government demanding she pay back the $65,000 Robodebt bill they claimed she had been overpaid. Rosemary’s nightmare began on September 19, 2016, when the letter arrived, an event that Rosemary confesses “turned my life upside down and created an enormous emotional and mental strain on me." The letter detailed that she was required to pay the total of $64,999.17 in overpaid welfare benefits. Centrelink claimed this was because her declared amounts did not reflect what she actually earned during the period of July 9, 2010, to 6 October, 2016. “It turned my life upside down,” Rosemary told the Robodebt Royal Commission on Monday, “I’ve never earned that much money, how could I owe that much money? And the fact I was to come up with it within a matter of three or four weeks, it was sheer terror.” The emotional 76-year-old admitted that she feared she would have to sell her home to cover the debt, and detailed the bleak path she saw before her, “all I could see was that I may be faced with selling my home and losing everything that I had worked for in my 70 years, and I just saw it all going away instantly.” After contacting Centrelink, Rosemary confirmed that what she had reported was the same as what was on the paperwork. She admitted to assuming that would “be the end of it.” Officials at Centrelink eventually told Rosemary that it came down to a “glitch”, and after a review, the total of her debt was reduced to $6,600. Of her Robodebt experience, Rosemary said, “it was a very dark period of time for me and one that is very difficult to re-live. My mental health and physical health, at that stage, were at a very low ebb.” A second review brought a new letter to Rosemary in December 2016, this time stating that her debt had been reduced to $120. Finally in 2020, Rosemary was informed by Centrelink that she would be refunded the $120, with the Coalition government winding up the unlawful scheme - ruled as such by the Federal Court in 2019. It is suspected that more than 381,000 people were affected, and that over $750m was wrongfully recovered from the victims. “I was shocked and angry by this time to think they could initially cause such a traumatic experience to anybody accessing support from a pension,” Rosemary told the Royal Commission, “it will continue to remain with me forever. It’s just something I will never get over and it has had a huge impact on my physical and mental wellbeing … “That they could turn someone’s life upside down and still get it so wrong over and over again.” Image: Getty Images

Money & Banking

"False sense of safety": More sharks spotted inside nets on popular beach

The effectiveness of shark nets is in question after two hammerheads were filmed inside the nets at Bondi Beach. Footage shared on Instagram by Drone Shark App founder Jason Iggledenm shows two sharks moving through the water, even showing the pair circling each other. “Two hammerhead sharks inside the shark nets at Bondi Beach this morning,” he wrote. “Great to see they diverted the nets safely.” “There were no swimmers in the area as it was just before sunrise,” he added. <blockquote class="instagram-media" style="background: #FFF; border: 0; border-radius: 3px; box-shadow: 0 0 1px 0 rgba(0,0,0,0.5),0 1px 10px 0 rgba(0,0,0,0.15); margin: 1px; max-width: 540px; min-width: 326px; padding: 0; width: calc(100% - 2px);" data-instgrm-captioned="" data-instgrm-permalink="https://www.instagram.com/reel/Cl0UPTkDOSs/?utm_source=ig_embed&utm_campaign=loading" data-instgrm-version="14"> <div style="padding: 16px;"> <div style="display: flex; flex-direction: row; align-items: center;"> <div style="background-color: #f4f4f4; border-radius: 50%; flex-grow: 0; height: 40px; margin-right: 14px; width: 40px;"> </div> <div style="display: flex; flex-direction: column; flex-grow: 1; justify-content: center;"> <div style="background-color: #f4f4f4; border-radius: 4px; flex-grow: 0; height: 14px; margin-bottom: 6px; width: 100px;"> </div> <div style="background-color: #f4f4f4; border-radius: 4px; flex-grow: 0; height: 14px; width: 60px;"> </div> </div> </div> <div style="padding: 19% 0;"> </div> <div style="display: block; height: 50px; margin: 0 auto 12px; width: 50px;"> </div> <div style="padding-top: 8px;"> <div style="color: #3897f0; font-family: Arial,sans-serif; font-size: 14px; font-style: normal; font-weight: 550; line-height: 18px;">View this post on Instagram</div> </div> <div style="padding: 12.5% 0;"> </div> <div style="display: flex; flex-direction: row; margin-bottom: 14px; align-items: center;"> <div> <div style="background-color: #f4f4f4; border-radius: 50%; height: 12.5px; width: 12.5px; transform: translateX(0px) translateY(7px);"> </div> <div style="background-color: #f4f4f4; height: 12.5px; transform: rotate(-45deg) translateX(3px) translateY(1px); width: 12.5px; flex-grow: 0; margin-right: 14px; margin-left: 2px;"> </div> <div style="background-color: #f4f4f4; border-radius: 50%; height: 12.5px; width: 12.5px; transform: translateX(9px) translateY(-18px);"> </div> </div> <div style="margin-left: 8px;"> <div style="background-color: #f4f4f4; border-radius: 50%; flex-grow: 0; height: 20px; width: 20px;"> </div> <div style="width: 0; height: 0; border-top: 2px solid transparent; border-left: 6px solid #f4f4f4; border-bottom: 2px solid transparent; transform: translateX(16px) translateY(-4px) rotate(30deg);"> </div> </div> <div style="margin-left: auto;"> <div style="width: 0px; border-top: 8px solid #F4F4F4; border-right: 8px solid transparent; transform: translateY(16px);"> </div> <div style="background-color: #f4f4f4; flex-grow: 0; height: 12px; width: 16px; transform: translateY(-4px);"> </div> <div style="width: 0; height: 0; border-top: 8px solid #F4F4F4; border-left: 8px solid transparent; transform: translateY(-4px) translateX(8px);"> </div> </div> </div> <div style="display: flex; flex-direction: column; flex-grow: 1; justify-content: center; margin-bottom: 24px;"> <div style="background-color: #f4f4f4; border-radius: 4px; flex-grow: 0; height: 14px; margin-bottom: 6px; width: 224px;"> </div> <div style="background-color: #f4f4f4; border-radius: 4px; flex-grow: 0; height: 14px; width: 144px;"> </div> </div> <p style="color: #c9c8cd; font-family: Arial,sans-serif; font-size: 14px; line-height: 17px; margin-bottom: 0; margin-top: 8px; overflow: hidden; padding: 8px 0 7px; text-align: center; text-overflow: ellipsis; white-space: nowrap;"><a style="color: #c9c8cd; font-family: Arial,sans-serif; font-size: 14px; font-style: normal; font-weight: normal; line-height: 17px; text-decoration: none;" href="https://www.instagram.com/reel/Cl0UPTkDOSs/?utm_source=ig_embed&utm_campaign=loading" target="_blank" rel="noopener">A post shared by MARINE LIFE SHOW🐳🐬🐋🦈 FROM Air (@dronesharkapp)</a> </div> </blockquote> It is understood the sharks were safely chased further out to sea by Bondi Lifeguards. However, if this was a day earlier, the situation would have been more alarming with thousands hitting the water for the iconic Bondi to Bronte swim. Many praised Jason, who named one of the sharks as a well-known local called Homer, for sharing the footage and a vital lesson. “Good job getting this message out!” one person wrote. “So important to debunk the ‘barrier’ myth.” “The fact these two were spotted on the beach-side of the net shows how outdated and ineffective this measure is,” Dr Leonardo Guida, a shark scientist and conservationist at the Australian Marine Conservation Society told Nine News. Earlier this year, the mayor of Waverly called for the shark nets to be removed saying they “create a false sense of safety” but the bid was ultimately rejected by the NSW Government. While the government says shark nets are not designed to create a total barrier between swimmers and sharks, it insists they are helpful in deterring sharks from establishing territories, thereby reducing the odds of a shark encounter. Image: Instagram

Travel Trouble

How much net-worth do you need to retire?

I’m often asked ‘How much net worth do I need to accumulate before I can retire?’ While everyone will have a different number depending on their wants and needs, let’s try to figure out yours. Net Worth, Assets & Liabilities Your net worth (aka net assets, net wealth) is what’s left over if you cashed in all your assets, and paid out all your liabilities. Keeping things simple, an asset is something of value, and a liability is a debt you owe. For example, if you purchased a car using a car loan then the car’s value is the asset, and the balance of the car loan is the liability. You can further split your assets and liabilities into two categories: lifestyle and financial. Lifestyle assets are items of value you own for necessity or enjoyment: home, clothes, car, furniture, etc. Lifestyle debt is money you borrow to purchase lifestyle assets. Financial assets are investments you purchase for return, and financial debt is money you borrow to purchase financial assets. Here’s a diagram that summarises how to calculate your net assets (i.e. net worth): <img src="https://oversixtydev.blob.core.windows.net/media/2022/11/net-worth-graph-1.jpg" alt="" width="1280" height="720" /> Are You Rich? If you find yourself in a situation where your liabilities are higher than your assets then you have negative net worth and are said to be ‘underwater’. Someone who can’t repay their liabilities is said to be insolvent, or more colloquially, flat out broke. If you’d like to compare your situation against the so-called Joneses, a Credit Suisse report ranked Australia as the richest country in the world, noting that at the end of 2021 the average Aussie had a net worth $410,000. The same report declared there were an estimated 390,000 Aussie millionaires, so pulling out my trusty calculator and dividing by our estimated population of approx 25.5m people, if you have a seven figure net worth then congratulations – you are in the top 1.5% of wealth builders and are amongst the richest of the rich. Before moving on, have a go at filling in the boxes in the diagram above to tally up your lifestyle and financial assets and liabilities and calculate your net worth. What Do The Results Indicate? Here’s a saying to remember: the more you do of what you’ve done, the more you’ll get of what you’ve got. Your present net worth is the product of your financial mindset and habits applied over time. Therefore, unless you improve your financial IQ and / financial EQ (i.e. the way you think, act and feel about money) then your future is unlikely to be any better than your present, and possibly considerably worse once you retire and cease receiving employment income. If your current net worth is strong, then well done and keep it up. If it’s not, or you want it to be better, then you’ll need help to up-skill and change your thoughts and behaviours before it’s too late. What’s Your Magic Number? My suggested magic number for a net worth number to aim for enough financial and lifestyle assets to afford the lifestyle you want in retirement. The goal is to be debt-free and have no financial or lifestyle liabilities. It’s important to point out that retirement isn’t necessarily the domain of older citizens. More and more, younger people are quietly quitting or seeking to be financially independent sooner so they can retire early. Financial Assets The amount of financial assets you need can be calculated by working backwards. That is, by dividing your desired annual income by your expected average investment return. <img src="https://oversixtydev.blob.core.windows.net/media/2022/11/net-worth-graph-2.jpg" alt="" width="1280" height="720" /> For example, if your annual desired income was $80,000, and you had the skill to achieve an 8 per cent annual return, then you would need financial assets totaling $1,000,000. That is, $1,000,000 invested at 8 per cent per annum will generate an income from your investments of $80,000 each year for the rest of your life. If you’re finding this all a bit confusing then you might find my ’10 and 8 Rule’ helpful. Simply multiply your current gross income by 10 to get your debt-free financial asset goal, and then multiply that result by 8 per cent (0.08) to get your estimated annual investment income. For instance, if you earned $70,000 per annum then your debt-free financial asset goal would be $700,000, and you would have an annual investment income of $56,000 to fund your retirement. Lifestyle Assets The amount of your lifestyle assets, such as home, furnishings, car, clothes, etc. all need to be added into the mix. The more extravagant your lifestyle needs, the larger your annual income will need to be to pay for it (and hence you’ll need more financial assets or the ability to achieve higher investment returns), and the bigger the lifestyle asset balance will need to be. Summary Taking into consideration everything we’ve discussed, here’s a blueprint you can follow to calculate your required net worth, and that also reveals how much more wealth you need to attract and keep to achieve your goal. <img src="https://oversixtydev.blob.core.windows.net/media/2022/11/net-worth-graph-3.jpg" alt="" width="1280" height="720" /> Have a go at filling in the boxes, working across each row left to right. If you end up with a surplus then you already have enough assets, you just need to redeploy them so your money is working harder for you. Edited extract from Steve McKnight’s Money Magnet: How to Attract and Keep a Fortune that Counts (Wiley $32.95), available now at all leading retailers. Image credits: Supplied / Getty Images

Retirement Income

Qantas staff to be given $5,000 bonus

Qantas has announced a nice $5,000 bonus to 19,000 of its employees as the carrier continues to recover after Covid. The Australian carrier’s net debt had risen to an eye-watering $6.4 billion due to next to no flights during the two years of closed borders. The net debt now sits well below pre-covid levels at $4 billion as more customers are opting to travel with Qantas. Qantas is now set to give 19,000 of its employees a one-off recovery boost of $5,000. In addition to the bonus, Qantas group will look at increasing permanent wages by two per cent, which were also frozen during lockdown and closed borders. It is expected that the entire ordeal will cost Qantas a whopping $87 million in the 2022 Financial Year. Qantas CEO Alan Joyce said recovery of the carrier began in December when the company decided to bring its workers back before borders opened. “It’s been a tough few years for everyone in aviation but we promised to share the benefits of the recovery once it arrived,” he said. “For our people, the recovery really started last December when we made the decision to bring everyone back to work ahead of schedule and well before all borders opened. “In February, we announced a bonus scheme that gives employees at least 1000 shares in the national carrier if key conditions are met, which are on track. “We’re announcing a one-off payment that goes some of the way to acknowledging the sacrifices our people have made, including long periods of no work and no annual wage increases. It also recognises the great work they are doing as we restart the airline, which has been challenging for everyone. “This comes at a time when travel demand is rebounding but our people are facing a unique set of cost of living pressures, which frankly they’d be in a better position to handle if aviation hadn’t been so badly hit over the past two years. That’s now changing. “We can’t afford to permanently increase salaries beyond the two per cent threshold we’ve set, but we can afford to make this one-off payment on top of the Qantas share rights we’ve already given. “Getting our permanent cost base right is how we’re able to reinvest, which ultimately means more opportunity for our people. “The structure of our business means many of our people see their salary increase significantly as their careers progress. That progression often relies on the business growing, so the recent investments we’ve announced in new aircraft and new ventures will see employees share in the benefit as the national carrier enters a new phase.” Image: Qantas

Money & Banking

Cancer patients go untreated due to hospital debts

A cancer centre in Palestine is turning away patients for the first time in its history, with some 500 patients turned away since September last year for one reason - it’s owed $96 million ($NZ 105 million). The cancer unit in the Augusta Victoria Hospital in eastern Jerusalem is owed the funds from the Palestinian Authority (PA) and is unable to buy the chemotherapy drugs needed to treat patients, according to the <a href="https://www.bbc.com/news/world-middle-east-60829319" target="_blank" rel="noopener">BBC</a>. “It’s the first time in our history that we’ve been forced to take the decision not to accept new patients,” Dr Fadi al-Atrash, the hospital’s deputy CEO, told the BBC. “We’re facing a very critical situation where we might be forced to close some departments in future. We might have to stop the treatment of patients already in our care. “It means that more people might die of cancer because they’re not receiving their treatment on time, or according to the right schedule.” A lack of funds for healthcare isn’t the only problem for the PA, which says it’s facing the worst financial crisis since it began 30 years ago, due to a combination of the pandemic, inflation and the Palestinian conflict with Israel. Salem al-Nawati, a 16-year-old with leukaemia from Gaza, collapsed outside the PA Health Ministry in Ramallah earlier in the year and was declared dead soon after. His uncle, Jamal al-Nawati, was fighting to secure a hospital bed for Salem, and detailed the barriers his nephew faced in accessing treatment. Since hospitals in Gaza are ill-equipped to treat many serious cases of cancer, Salem was given a medical referral and PA financial guarantee for treatment in a private hospital in Nablus. However, after being initially refused a travel permit by Israel, Salem arrived for treatment a month later and was turned away from the Nablus hospital because its bills hadn’t been paid by the PA. “I was wondering what we’d done wrong, what had this poor patient ever done?” Mr al-Nawati said. “Salem’s condition was deteriorating hour-by-hour, day-by-day. He was so sad, asking me why he was being refused treatment, and I was doing my best to reassure him.” Though an influential family friend intervened, resulting in the PA offering to send Salem to an Israeli hospital, his permit didn’t allow him to travel there. Image: Getty Images

Caring

Wild scenes after No.1 seed slaps opponent at the net

A tennis player has been caught on camera slapping his opponent - so, is this Will Smith’s match? Michael Kouame, 15, lost to Raphael Nii Ankrah, 16, 2-6 7-6 6-7 in the first round of an ITF juniors tournament in Accra, Ghana’s capital. The pair met at the net to shake hands before Michael slapped Raphael in the face before a brawl ensued amongst attendees. <blockquote class="twitter-tweet"> <a href="https://t.co/4B0NjVI5zv">pic.twitter.com/4B0NjVI5zv</a> — SHARP SHOOTER 🔫 (@Kwesi_Gibson) <a href="https://twitter.com/Kwesi_Gibson/status/1511083902382792716?ref_src=twsrc%5Etfw">April 4, 2022</a></blockquote> Footage of the incident was shared to Twitter with many pointing out that Michael should not have slapped Raphael and tried to run away. “I think he forgot his location..how can you slap someone in his own country,” someone pointed out. “Kid was running ? You can’t start sh*t and then run away,” another commented. “The coward ran away? Disgraceful behavior!” another wrote. Image: Twitter

Legal

Want to become debt-free this year?

Simple tips that help you live debt freeGetting into debt can be incredibly stressful. Constantly worrying about paying your debt while still having enough money to stay afloat can make you feel lost like you’re running in a never-ending maze. There are ways to stay out of debt, though. You can avoid these 15 money mistakes that are costing you thousands, learn 5 steps to avoid the credit card trap and even learn what rich people never ever buy to help you save a couple of bucks. You can also pick up these smart habits to help you live debt-free.Set goalsHaving a plan means having a purpose. “[People] that lead healthy financial lives more often than not have clear financial goals and are actively working towards them,” says Yoni Dayan, chief editor of Money Under 30; he adds that “if you have a good ‘why’ to save, the ‘how’ will come much more naturally.”Wait to buy “If you have trouble with impulse spending, waiting a few days is a great habit,” Joe Udo of blog Retire By 40 explains. “You may find a lower price or simply realise that you don’t need it after all.” While this is particularly helpful when it comes to big-ticket items, like a new TV or even a new car, it can also apply to everyday buys that can add up over time.Turn off auto-payFinancial planner, Shannah Compton Game, recommends removing all auto-pay or auto-fill options on sites where you shop frequently. This forces you to “think about how much money you’re spending before you hit the ‘buy now’ button,” she saysPay as you go Surprise parties are great. Surprise bills are not. To avoid owing at the end of the month, Erica Gellerman, creator of The Worth Project, suggests treating your credit card like a debit card. “For example, if I swipe on lunch for $10 and gas for $40 I’ll use the credit card app on my phone that night to transfer $50 from my checking account,” she explains. “That way I’m not spending money that I don’t have.”Pre-pay your credit cardThis tip from Compton Game is pure genius: “Pre-pay your credit card for however much you’ve budgeted for the week for your expenses,” she advises. It will help keep your bank balance in check and stop you from spending money you don’t have.Don't carry a balanceThere’s a two-word reason: interest payments. Udo says that when he uses credit cards, “I always make sure to pay the bill in full every month. I get all the convenience without having to pay interest to the bank.” If you can’t pay it all, a good rule of thumb is to never carry more than 30 per cent of your credit limit to the next month. Bonus: paying off your balance every month is a good way to boost your credit rating.Use cashAnother thing to consider if you find yourself holding a hefty credit card bill when the 31st rolls around, is to start paying with cash. Udo explains that not only does this make sure you’re living within your means but “the physical action of handing over cash to someone else is a lot more difficult than swiping a card.”Automate your savingsRemembering to set aside money each month is tough. Fortunately, financial planner, Sophia Bera, has a sneaky solution. “Automate your savings and retirement contributions so you don’t have to think about it yet you’re consistently making progress on your goals.”Find inexpensive alternativesMore free time often involves spending more money, from brunch to happy hour to window shopping (which turns into actual shopping). “Nothing is wrong with these activities, but when I was doing them out of habit, I realised that so much of my spending was on things that I didn’t really care that much about,” Gellerman says. Now she keeps a list of budget-friendly activities to swap out for her pricier pastimes, like inviting friends over or going on a walk.Have a good attitude As new age-y as it may sound, the law of attraction applies to money, too. The better your attitude is towards your finances, the better your finances will be. “Come at money from a place of enjoyment and abundance instead of fear or scarcity,” Taylor Simpson, founder of The Money Mindset Masterclass says. “Know and believe money comes to you easily – when you feel this, you’ll live it.” One way to do that? Say “thank you” when you spend money to start seeing it as something that comes and goes effortlessly.Create an emergency fundAccording to a recent survey by Mozo, only 25 per cent of Australians have the savings to stay afloat when faced with unforeseen circumstances. To prevent going into debt, however, you should have enough set aside that you could cover a minimum of three to six months worth of living expenses in case something drastic should happen.Don't boost your budgetNo matter what. That means even if you get a raise, start a side gig or even win the lottery – stay firm to your original budget. Better yet, funnel all that extra income directly into your savings or retirement fund, so you won’t even feel like you’re missing anything.Skip the take-away coffeesYes, you’ve heard it before but it bears repeating: Time, in partnership with NextAdvisor, broke down exactly how much you’d save if you swapped your twice-daily coffee habit with home-brewed coffee – and it’s a lot. Assuming you spend $3.95 on your cappuccino, twice a day, you could be losing over $2,800.00 per year – compared to spending just $100 per year with home-brewed coffee. Something to keep in mind is that number could be more or less, depending on your order. If you have a more expensive coffee habit, prepare to spend more per year.Track your progressIf you have a financial goal in mind, say to save up an emergency fund by the end of the year, track your progress to see how you’re doing. Seeing that number increase each time you look can give you the motivation to keep your smart spending habits on track. Or, if you don’t see it increase as much as you’d like, you can adjust your spending habits to get back on track. Either way, tracking how much you save will help you figure out if your saving habits are efficient or not.Compare pricesIt’s tempting to grab something we want or need as soon as we see it, but smart spenders know to compare prices and see where to get the best deal. They utilise fliers, apps, and websites to compare prices. For instance, MotorMouth, which makes it easy to compare the price of fuel at one servo with the others, highlighting the cheaper and more expensive service stations right across the region. Comparing prices can cut your spending and allow you to put extra money aside.This article originally appeared on <a href="https://www.readersdigest.com.au/food-home-garden/money/15-everyday-habits-of-debt-free-people">Reader's Digest</a>.

Retirement Income

Prince Andrew settles debt on Swiss chalet ahead of potential sale

Prince Andrew has settled the outstanding debt on his seven-bedroom Swiss ski chalet, potentially enabling him to sell it in order to finance his court costs. The previous owner of the £17 million home in Verbier had taken the Prince to court after he allegedly failed to pay the final installment. However, Isabelle de Rouvre recently told the MailOnline, “The war is over. He has paid the money.” That could mean that last week’s trip to the chalet by ex-wife Sarah Ferguson and daughters Beatrice and Eugenie could be the last time the family visits. Multiple reports have said the Duke of York wants to sell the property in order to raise money for his legal battle with Virginia Giuffre, who is suing Andrew for allegedly sexually assaulting her when she was a teenager, and who is seeking unspecified damages, which could amount to millions of dollars. The Queen has reportedly refused to fund any court bill or potential settlement, forcing Andrew to find the money himself. It’s thought that Andrew paid between £17 million and £18 million for the chalet in 2014, agreeing to pay in installments. £13 million came from a mortgage and the rest was to be paid in cash, but de Rouvre, a French socialite, accused them of not paying the final £5 million in 2019, and took the issue to court, seeking payment as well as £1.6 million in interest. The total amount sought by Ms de Rouvre worked out to roughly $12,477,522AUD. Ms de Rouvre told the MailOnline, “I sold it two months ago, or was it one. Maybe six weeks ago. “Anyway, I sold it to the Yorks and we made an agreement. That is the end of the story thankfully. The war is finished. It is the end of the matter. I have nothing to do with it now. That’s all. “I don’t know what they are doing now. They were here at Christmas but I only know that because I read it in the press. I did not see them. So Happy Christmas and that’s that. The end.” The sale of the chalet would leave Andrew owning no property in either the UK or abroad. The duke is awaiting a ruling from Judge Lewis Kaplan on whether he will face a full civil court case over the allegations, which he has consistently denied. His legal team has argued Ms Giuffre waived her right to sue when she signed a $500,000 settlement agreement with Jeffrey Epstein in 2009. Image: Steve Parsons - WPA Pool/Getty Images

Real Estate

Blue-sky thinking: net-zero aviation is more than a flight of fantasy

As international air travel rebounds after COVID-19 restrictions, greenhouse gas emissions from aviation are expected to rise dramatically – and with it, scrutiny of the industry’s environmental credentials. Aviation emissions have almost <a href="https://www.newscientist.com/article/2253626-aviations-contribution-to-global-warming-has-doubled-since-2000/">doubled since 2000</a> and in 2018 reached <a href="https://ourworldindata.org/co2-emissions-from-aviation">one billion tonnes</a>. Climate Action Tracker rates the industry’s climate performance as <a href="https://climateactiontracker.org/sectors/aviation/">critically insufficient</a>. As the climate change threat rapidly worsens, can aviation make the transition to a low-carbon future – and perhaps even reach net-zero emissions? The significant technological and energy disruption on the horizon for the industry suggests such a future is possible. But significant challenges remain. Achieving a net-zero aviation sector will require a huge collaborative effort from industry and government – and consumers can also play their part. <iframe width="440" height="260" src="https://www.youtube.com/embed/nW6J989UBhA?wmode=transparent&start=0" frameborder="0" allowfullscreen=""></iframe> <h2>Build back better</h2> The aviation sector’s progress in cutting emissions has been disappointing to date. For example, in February last year, <a href="https://theconversation.com/major-airlines-say-theyre-acting-on-climate-change-our-research-reveals-how-little-theyve-achieved-127800">research</a> on the world’s largest 58 airlines found even the best-performing ones were not doing anywhere near enough to cut emissions. Most recently, at the COP26 climate change summit in Glasgow, the industry merely reasserted a commitment to a plan known as the <a href="https://www.icao.int/environmental-protection/CORSIA/Pages/default.aspx">Carbon Offsetting and Reduction Scheme for International Aviation</a>. The scheme relies on carbon offsetting, which essentially pays another actor to reduce emissions on its behalf at lowest cost, and doesn’t lead to absolute emissions reduction in aviation. The scheme also encourages alternative cleaner fuels, but the level of emissions reduction between fuels varies considerably. Governments have generally failed to provide strong leadership to help the aviation sector to reduce emissions. This in part is because pollution from international aviation is not counted in the emissions ledger of any country, leaving little incentive for governments to act. Aviation is also a complex policy space to navigate, involving multiple actors around the world. However, COVID-19 has significantly jolted the aviation and travel sector, presenting an opportunity to build back better – and differently. Griffith University recently held a <a href="https://www.griffith.edu.au/institute-tourism/our-research/rethinking-aviation/aviation-reimagined-2021?fbclid=IwAR3Hd8xLJkEWMaHae8sho1MiSfV6TzbPbf30vo2fbJ0CHMg-xdvywNCmZbU">webinar series</a> on decarbonising aviation, involving industry, academic and government experts. The sessions explored the most promising policy and practical developments for net-zero aviation, as well as the most significant hurdles. <img src="https://images.theconversation.com/files/437570/original/file-20211214-25-1rc1cnc.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" alt="passengers queue at airport" /> COVID-19 has significantly jolted the aviation sector. Steven Senne/AP <h2>Nations soaring ahead</h2> Some governments are leading the way in driving change in the aviation industry. For example, as a result of <a href="https://www.government.se/495f60/contentassets/883ae8e123bc4e42aa8d59296ebe0478/the-swedish-climate-policy-framework.pdf">government policy</a> to make Sweden climate-neutral by 2045, the Swedish aviation industry developed a <a href="https://fossilfrittsverige.se/en/roadmap/the-aviation-industry/#:%7E:text=The%20strategic%20objective%20for%202030,line%20with%20the%20Government%27s%20goals">roadmap</a> for fossil-free domestic flights by 2030, and for all flights originating from Sweden to be fossil-free by 2045. Achieving fossil-free flights requires replacing jet fuel with alternatives such as sustainable fuels or electric and hydrogen propulsion. The European Union plans to <a href="https://ec.europa.eu/commission/presscorner/detail/en/qanda_21_3662">end current tax exemptions</a> for jet fuel and introduce measures to <a href="https://www.eurocontrol.int/article/eus-fit-55-package-what-does-it-mean-aviation">accelerate</a> the uptake of sustainable fuels. The United Kingdom is finalising its strategy for <a href="https://www.gov.uk/government/consultations/achieving-net-zero-aviation-by-2050">net-zero aviation</a> by 2050 and a public body known as UK Research and Innovation is <a href="https://www.ukri.org/our-work/our-main-funds/industrial-strategy-challenge-fund/future-of-mobility/future-flight-challenge/">supporting</a> the development of new aviation technologies, including hybrid-electric regional aircraft. Australia lacks a strategic framework or emissions reduction targets to help transition the aviation industry. The <a href="https://www.infrastructure.gov.au/infrastructure-transport-vehicles/aviation/emerging-aviation-technologies/drones/eatp">Emerging Aviation Technology Program</a> seeks to reduce carbon emissions, among other goals. However, it appears to have a strong focus on freight-carrying drones and <a href="https://www.greenbiz.com/article/7-urban-air-mobility-companies-watch">urban air vehicles</a>, rather than fixed wing aircraft. <img src="https://images.theconversation.com/files/437569/original/file-20211214-13-lsswi6.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" alt="plane taking off" /> Some governments are leading the way in driving change in the aviation industry. Zhao Xiaojun/AP <h2>Building tomorrow’s aircraft</h2> Low-emissions aircraft technology has developed substantially in the last five years. Advancements include electric and hybrid aircraft (powered by hydrogen or a battery) – such as that being developed by <a href="https://www.airbus.com/en/innovation/zero-emission/hydrogen/zeroe">Airbus</a>, <a href="https://www.rolls-royce.com/innovation/accel.aspx">Rolls Royce</a> and <a href="https://www.zeroavia.com/">Zero Avia</a> – as well as <a href="https://boeing.mediaroom.com/2021-07-14-Boeing-and-SkyNRG-Partner-to-Scale-Sustainable-Aviation-Fuels-Globally">sustainable aviation fuels</a>. Each of these technologies can reduce carbon emissions, but only battery and hydrogen electric options significantly reduce non-CO₂ climate impacts such as oxides of nitrogen (NOx), soot particles, oxidised sulphur species, and water vapour. For electric aircraft to be net-zero emissions, they must be powered by renewable energy sources. As well as being better for the planet, electric and hydrogen aircraft are likely to have <a href="https://www.zeroavia.com/">lower</a> energy and maintenance <a href="https://www.scientificamerican.com/article/electric-aviation-could-be-closer-than-you-think/">costs</a> than conventional aircraft. This decade, we expect a rapid emergence of electric and hybrid aircraft for short-haul, commuter, air taxi, helicopter and general flights. Increased use of sustainable aviation fuel is also likely. Although electric planes are flying, commercial operations are not expected until at least 2023 as the aircraft must undergo rigorous testing, safety and certification. <img src="https://images.theconversation.com/files/437571/original/file-20211214-23-1clsep1.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" alt="A solar powered aircraft prototype flies in mountainous terrain" /> Electric planes exist, but the route to commercialisation is long. Pictured: a solar powered aircraft prototype flies near the France-Italy border. Laurent Gillieron/EPA <h2>Overcoming turbulence</h2> Despite real efforts by some industry leaders and governments towards making aviation a net-zero industry, significant strategic and practical challenges remain. Conversion to the commercial mainstream is not happening quickly enough. To help decarbonise aviation in Australia, industry and government should develop a clear strategy for emissions reduction with interim targets for 2030 and 2040. This would keep the industry competitive and on track for net-zero emissions by 2050. Strategic attention and action is also needed to: <ul> <li> advance aircraft and fuel innovation and development </li> <li> update regulatory and certification processes for new types of aircraft </li> <li> enhance production and deployment of new aviation fuels and technologies </li> <li> reduce fuel demand through efficiencies in route and air traffic management </li> <li> create “greener” airport operations and infrastructure </li> <li> build capability with pilots and aerospace engineers. </li> </ul> The emissions created by flights and itineraries can <a href="https://theicct.org/sites/default/files/publications/variation-aviation-emissions-itinerary-jul2021-1.pdf">vary substantially</a>. Consumers can do their part by opting for the lowest-impact option, and offsetting the emissions their flight creates via a <a href="https://theconversation.com/flying-home-for-christmas-carbon-offsets-are-important-but-they-wont-fix-plane-pollution-89148">credible program</a>. Consumers can also choose to fly only with airlines and operators that have committed to net-zero emissions. Net-zero aviation need not remain a flight of fantasy, but to make it a reality, emissions reduction must be at the heart of aviation’s pandemic bounce-back.<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/171940/count.gif?distributor=republish-lightbox-basic" alt="The Conversation" width="1" height="1" /> <a href="https://theconversation.com/profiles/emma-rachel-whittlesea-1280917">Emma Rachel Whittlesea</a>, Senior Research Fellow, <a href="https://theconversation.com/institutions/griffith-university-828">Griffith University</a> and <a href="https://theconversation.com/profiles/tim-ryley-1253269">Tim Ryley</a>, Professor and Head of Griffith Aviation, <a href="https://theconversation.com/institutions/griffith-university-828">Griffith University</a> 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/blue-sky-thinking-net-zero-aviation-is-more-than-a-flight-of-fantasy-171940">original article</a>. Image: Shutterstock

Domestic Travel

Afterpay enters Aussie pubs, experts warn of “debt spiral”

Afterpay – the popular buy now, pay later (BNPL) service – has made the jump from retail stores to over 160 Aussie pubs. But consumer advocates are worried that the move could send some people into a “debt spiral”. Australian Venue Co (AVC) has become the first hospitality group to partner with Afterpay as part of its ‘Dine Now, Pay Later’ offering – which rolls out across its venues from November 15. AVC CEO Paul Waterson said the decision was driven by customer demand, who he said have shifted away from credit cards, as well as a desire to offer convenient experiences for guests, “We’re not afraid to go first. As a group, we seek out other industry leaders who we can work with to innovate on behalf of our customers,” he said. “We are looking forward to our guests being able to choose an alternative, innovative way to pay for dining out at our pubs.” However Katherine Temple, the policy and campaigns director at the Consumer Action Law Centre, said the centre has seen more people struggling with BNPL debts, making the move from AVC all the more concerning. “Often buy now, pay later is part of a larger debt so people are also struggling with existing credit card debts or personal loans or utility loans, so it’s rarely the only type of debt when they come to us,” she told <a rel="noopener" href="https://www.news.com.au/finance/money/costs/afterpay-moves-into-hospitality-with-australian-venue-co/news-story/b569dcf94efcde0e5eef2ba79852c24f" target="_blank">news.com.au</a>. “The debt varies but it can be [from] a couple of thousand dollars up to tens or hundreds of thousands of dollars of debt and we are hearing from people of all ages and walks of life that are using these products now.” James Hunt, a policy advisor at Financial Counselling Australia, told <a rel="noopener" href="https://www.goodfood.com.au/eat-out/news/twobeer-pub-trip-or-sixweek-hangover-afterpay-comes-to-the-pub-20211104-h1zlwk" target="_blank">Good Food</a> that Afterpay and other BNPL companies aren’t required to check if customers can afford the repayments, “so unfortunately many people are ending up with unmanageable debt”. Ms Temple shares those concerns, citing a lack of safeguards “to ensure people can afford to make repayments”, which she says exacerbates “financial hardship and money problems”. “Buy now, pay later is everywhere now and is normalising debt particularly for younger people,” she said. A spokesperson for Afterpay said the company enters new consumer markets based on demand. “As credit cards steeply decline, Australians are looking for smarter ways to manage their budget, using their own money, and avoiding interest and debt traps,” they said. They also said the Afterpay’s product has built-in spending rules to ensure customers don’t pay interest or revolve in debt. “Customers are unable to continue using Afterpay if they are late on a single instalment,” they added. However, customers do pay some fees if they miss a payment, with Afterpay collecting a whopping $70 million in late fees in 2020. The Australian Securities and Investments Commission (ASIC) also criticised Afterpay, Zip, and other BNPL providers for charging excessive fees. In a report released last year, the regulator found that one in five BNPL users are missing payments. It also found that 15 percent of users had taken out additional loans to pay for the services. As for Afterpay’s place in pubs, chief spokesperson for CANSTAR Steve Mickenbacker said it could be especially challenging to navigate. “You visit a pub, perhaps budgeting to buy two drinks … BNPL puts you in a position to turn those two drinks into eight,” he said. “Without self-discipline, that two-beer pub trip could become a six-week hangover.” Images: Getty Images

Money & Banking

Squid Game is influenced by the horror of survival comics and real-life debt

Note: The following article contains spoilers about “Squid Game.” Is the Netflix Korean sensation Squid Game <a href="https://www.nme.com/reviews/tv-reviews/squid-game-review-netflix-k-drama-3056718">an allegory for late capitalism</a>? The response to the show is similar to <a href="https://www.britannica.com/art/morality-play-dramatic-genre">medieval morality plays that attempted to hammer home the eternal damnability of the Seven Deadly Sins</a>. I’m a university literature professor who specializes in film and video media. This means that I’m usually on the hunt for “constitutive contradictions” — <a href="https://doi.org/10.7208/9780226670973-010">those hypocrisies that may defy the rule of law and common sense, but are required in allegedly just, democratic, ultra-advanced capitalist societies</a>. And so, I’m undecided between a red button and a green button of the types that figure in Squid Game Episode 2’s mockery of an election. If allegory is a story or performance conveying deeper or hidden meaning that its audience must work to interpret, the show would qualify based on audience reaction alone. But maybe it isn’t at all allegorical, in that Squid Game makes what little covert evil and hypocrisy may remain in our world so graphically, unmistakably overt. <h2>Alternatives to capitalism</h2> This series socks us with what cultural theorist Mark Fisher called “<a href="https://libcom.org/files/Capitalist%20Realism_%20Is%20There%20No%20Alternat%20-%20Mark%20Fisher.pdf">capitalist realism</a>” — the impossibility of imagining an outside to the political-economic system in which most of us live, let alone an alternative to it. But when asked if he deliberately set out to expose the dehumanizing and even lethal effects of late capitalism, Squid Game creator Hwang Dong-hyuk laughed off the suggestion that his blockbuster series delivers any “profound” point or message. “The show is motivated by a simple idea,” he told the Guardian. “<a href="https://www.theguardian.com/tv-and-radio/2021/oct/26/squid-games-creator-rich-netflix-bonus-hwang-dong-hyuk">We are fighting for our lives in very unequal circumstances</a>.” Hwang referred to his own experience of the <a href="https://www.rba.gov.au/education/resources/explainers/the-global-financial-crisis.html">2009 global economic downturn</a> as an inspiration for the series, which saw financing for his film projects dry up and compelled him, his mother and grandmother to take out loans. Drawn to the hardcore survivalist games depicted in Japanese and South Korean comic books, Hwang pondered just how bad things could get and how far he might go to keep himself and his family alive. He didn’t need to look far to find cautionary tales. <iframe width="440" height="260" src="https://www.youtube.com/embed/N0p1t-dC7Ko?wmode=transparent&start=0" frameborder="0" allowfullscreen=""></iframe> ‘Squid Game’ creator Hwang Dong-hyuk named Japanese manga and cult movie ‘Battle Royale’ as one of his influences. <h2>Real-life events</h2> The back story of Squid Game‘s protagonist, Seong Gi-hun, is a fictionalized retelling of the violent 2009 <a href="https://www.thenation.com/article/culture/squid-game-review/">clash between car manufacturer Ssangyong and 1,000 of the over 2,600 employees</a> Ssangyong laid off. Striking workers stood down a brutal alliance of private security forces and Korean police for 77 days. Thirty strikers and a few of their spouses lost their lives — many to suicide — during the strike and its aftermath in the Korean courts. Continued under- and unemployment, loss of property and accumulated debt (<a href="https://www.bloomberg.com/graphics/2021-coronavirus-global-debt/">compounded by the COVID-19 pandemic</a>), has meant that in 2021, personal debt in South Korea climbed to <a href="https://www.theguardian.com/world/2021/oct/08/squid-game-lays-bare-south-koreas-real-life-personal-debt-crisis">105 per cent of GDP</a>. Canada’s average household debt <a href="https://tradingeconomics.com/canada/households-debt-to-gdp">skyrocketed to 112 per cent of GDP in the first quarter of 2021, before dropping to 109 per cent in the second quarter</a>. “We are all living in a Squid Game world,” Hwang told the Guardian, without pretension or exaggeration. <h2>Financial demands</h2> Actor Lee Jung-jae as Seong Gi-hun is riveting as our everyman. Like millions of workers displaced and discarded worldwide, Squid Game’s protagonist Gi-hun tries to stay afloat in the service and gig economies, with a fried chicken restaurant that quickly fails, and then as a driver. He takes out loans from banks and loan sharks that tenuously prop up his gambling addiction. Gi-hun’s ex-wife has remarried, to a gainfully employed man, and is planning to move with him to the United States, along with Gi-hun’s daughter. The new husband can afford to celebrate his stepdaughter’s birthday with dinner at a steakhouse (uttered in English, so all know it’s a big deal), while Gi-hun can only pay for a hot dog and fish cake fast-food snack, and a tragicomic inappropriate gift clawed out from an arcade game. <iframe width="440" height="260" src="https://www.youtube.com/embed/t6YuqFh5htw?wmode=transparent&start=0" frameborder="0" allowfullscreen=""></iframe> Despite his financial situation, Gi-hun tries to redeem himself on his daughter’s birthday. An inveterate gamer and perennial optimist with an endearingly expressive face, Gi-hun lives on the cusp of the Big Payoff — whether off-track betting, withdrawing money from his mother’s bank account or accepting an invitation to play a <a href="https://www.radiotimes.com/tv/drama/squid-game-paper-flip-ddakji-how-to-play/">game of ddakji</a> in a Seoul subway station. But like all games of chance in the nine-episode series, it’s clear that this one — where players toss paper tokens in an attempt to flip over their opponent’s tokens — is rigged from before the start. It’s also clear that all 456 competitors (Gi-hun is No. 456) are in a <a href="https://www.merriam-webster.com/dictionary/battle%20royal">battle royal</a> for their lives and a giant cash jackpot, which lends the show its highest-stakes, highest-concept brand of suspense. <h2>Contradictions</h2> What may be less clear — and potentially the stuff of constitutive contradictions and ironies galore — is why record numbers of viewers have flocked to Squid Game. The series is <a href="https://www.thenation.com/article/culture/squid-game-review/">the most watched Netflix series ever</a>, beating out previous ratings champion Bridgerton. Bloomberg News estimates Squid Game’s worth to Netflix to be <a href="https://www.marketwatch.com/story/squid-game-is-worth-nearly-900-million-to-netflix-report-11634511855?mod=article_inline">close to US$900 million</a>. The whole series, however, only <a href="https://www.marketwatch.com/story/squid-game-is-worth-nearly-900-million-to-netflix-report-11634511855">cost about $21 million to make</a>, while creator Hwang lost six teeth from all the stress and has received no performance-based bonuses. He also doesn’t want to be forever known as “the Squid Game guy.” <a href="https://images.theconversation.com/files/429792/original/file-20211102-39236-6iqujn.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=1000&fit=clip"><img src="https://images.theconversation.com/files/429792/original/file-20211102-39236-6iqujn.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" alt="An aerial view of Seoul, showing highrises and shanty towns" /></a> Personal debt in South Korea climbed to 105 per cent of GDP in 2021. (Shutterstock) An unidentified Korean part-time food delivery driver told the Guardian: “You have to pay to watch [the show] and I don’t know anyone who will let me use their Netflix account.… In any case, why would I want to watch a bunch of people with huge debts? <a href="https://www.theguardian.com/world/2021/oct/08/squid-game-lays-bare-south-koreas-real-life-personal-debt-crisis">I can just look in the mirror</a>.” Why indeed would anyone in financial straits like any of the players in the series want to watch Squid Game? I’ve searched the internet, without success, for a ballpark number of the 142 million households that tuned in globally who may have signed up for a Netflix free-trial period to do so. Hwang is currently in discussions with his streaming empire paymasters <a href="https://www.hollywoodreporter.com/tv/tv-news/squid-game-creator-season-2-meaning-1235030617/">over potential additional seasons as well as his other film projects</a>. Considering <a href="https://www.fool.com/investing/2021/08/05/netflix-subscriber-growth-accelerate-through-2025/">industry growth predictions</a>, what will some viewers pay or sacrifice to keep watching Squid Game? More to the point, why would they? I think an answer to the late-capitalist allegory question hinges on what audiences see reflected back to themselves on screen. One viewer might recognize their own challenging situation in a character’s story, while another sees suffering of an unimaginable kind. These divergent vectors of identification may determine whether there is or isn’t any profound or hidden meaning to Squid Game. They may also influence new, gruesome games of chance, manipulation and life-or-death next season. We’ll have to stay tuned to find out.<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/170514/count.gif?distributor=republish-lightbox-basic" alt="The Conversation" width="1" height="1" /> <a href="https://theconversation.com/profiles/elaine-chang-1283642">Elaine Chang</a>, Associate Professor, English and Theatre Studies, <a href="https://theconversation.com/institutions/university-of-guelph-1071">University of Guelph</a> 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/squid-game-is-influenced-by-the-horror-of-survival-comics-and-real-life-debt-170514">original article</a>. Image: Shutterstock

Our Partners

Over 60

News

Shop

Catalogues

Newspaper

Contests

Entertainment

Travel

Health

Lifestyle

Finance

Property

Compare

Games

Information

Keep up to date

Search

What are ‘good’ and ‘bad’ debts, and which should I pay off first?

Matthew Perry's huge net worth revealed

5 signs your friend is struggling with serious debt

Forcing people to repay welfare ‘loans’ traps them in a poverty cycle – where is the policy debate about that?

Too big, too heavy and too slow to change: road transport is way off track for net zero

King Charles’ eye-watering net worth revealed

Don’t let financial shame be your ruin: open conversations can help ease the burden of personal debt

What to do when your friend owes you a few

"I had better make sure I don’t have a heart attack!": Allison Langdon stuns pensioners on the verge of bankruptcy

"Sheer terror": Pensioner slapped with five-figure government fine

"False sense of safety": More sharks spotted inside nets on popular beach

How much net-worth do you need to retire?

Qantas staff to be given $5,000 bonus

Cancer patients go untreated due to hospital debts

Wild scenes after No.1 seed slaps opponent at the net

Want to become debt-free this year?

Prince Andrew settles debt on Swiss chalet ahead of potential sale

Blue-sky thinking: net-zero aviation is more than a flight of fantasy

Afterpay enters Aussie pubs, experts warn of “debt spiral”

Squid Game is influenced by the horror of survival comics and real-life debt

Our Partners

News

Shop

Catalogues

Newspaper

Contests

Entertainment

Travel

Health

Lifestyle

Finance

Property

Compare

Games

Information

Keep up to date

Search

What are ‘good’ and ‘bad’ debts, and which should I pay off first?

Matthew Perry's huge net worth revealed

5 signs your friend is struggling with serious debt

Forcing people to repay welfare ‘loans’ traps them in a poverty cycle – where is the policy debate about that?

Too big, too heavy and too slow to change: road transport is way off track for net zero

King Charles’ eye-watering net worth revealed

Don’t let financial shame be your ruin: open conversations can help ease the burden of personal debt

What to do when your friend owes you a few

"I had better make sure I don’t have a heart attack!": Allison Langdon stuns pensioners on the verge of bankruptcy

"Sheer terror": Pensioner slapped with five-figure government fine

"False sense of safety": More sharks spotted inside nets on popular beach

How much net-worth do you need to retire?

Qantas staff to be given $5,000 bonus

Cancer patients go untreated due to hospital debts

Wild scenes after No.1 seed slaps opponent at the net

Want to become debt-free this year?

Prince Andrew settles debt on Swiss chalet ahead of potential sale

Blue-sky thinking: net-zero aviation is more than a flight of fantasy

Afterpay enters Aussie pubs, experts warn of “debt spiral”

Squid Game is influenced by the horror of survival comics and real-life debt

Our Partners

Join Over60