Think Ritch NO, my spell check is not broken. You should always be thinking richly, and occasionally you should visit the archived newsletter section of the invest-org-au website. There you will find a wealth of information, ramblings and also be able to “back trade” to see how much money my previous ingenious tips would have made for you…
With the above, the “Think RITCH” refers to a little acronym for “Refund of Imputation Tax Credits”. Even if you are NOT a tax-payer, if you receive a pension or benefit that is tax-free, you can still get extra RITCH. If you do NOT submit a tax return, you can still lodge a single page RITC form to the Australian Tax Office and you can get FREE MONEY (a refund of your imputation tax credits. This is because Australian companies usually pay tax on their profits before they pay the shareholders. Often they pay more tax than you would, and as an owner, you can ask for this back).
Note that it is nobody’s job to tell you this… If you are entitled to get money back from the Australian Tax Office, do not expect them to call you and say “Ah, we have $945 of your money, would you like it back?” It is NOT gonna happen. Do not wait for the ATO to call you. Do not expect your accountant or Financial Planner to call you and tell you (unless they are REALLY nice and good at their job).
It is up to you to ask for the money. To quote Jesus out of context, “You have not, because you ask not”. Pensioners, self-funded retirees and any of those who earn less than $60 000 could definitely benefit from ownership of Australian shares and/or managed funds. Check with your accountant or call the ATO regarding RITC. Invest five minutes of your time and as little as $500 of your money to benefit twice (the investment could make you money, plus the ATO gives you money when you fill in the RITC form). Call your favourite investment adviser or Financial Planner to find out more. Keep Thinking RITCH…
Australia, you’re moving on up. Sometimes they report boring things on the financial news (OK, most of the time), and it seems boring because they use jargon and you don’t know what it means, or how it impacts you. National Accounts Surplus is up; is that good? Foreign Accounts Deficit is down; is that bad? Balance of Trade Figures ascendant; is that a rock band?
Ignoring the jargon of GDP and import/export figures, just try to think of Australia as a business. The business buys things, and sells things to other people. A business such as “Beds R’ Us” may buy timber for $20, turn it into a bed (paying the tradesman $10) and then sell the bed for $50. This means that they made a profit, and will probably make a larger profit the next year (because with more profits they can buy more timber and employ more staff), and they will probably continue to grow.
In the last decade, the cost of manufactured goods (such as cars, clothing, cameras, TVs and DVD players) has actually fallen; quite dramatically in the last few years. (Are you old enough to remember when the cheapest new car was around $30 000? Now they can make a brand new car for $13 000. Remember when digital cameras and DVDs were over a thousand dollars? Now they sell them in the grocery stores!)
Australia buys a lot of manufactured goods. Over the same timeframe, the cost of raw materials (coal, oil, gas, steel, wheat, cattle, aluminium and gold) has risen, again quite dramatically in the last few years.
Thinking again of Australia as a business that buys and sells things, that puts us in a good position. We are buying things for less, and selling things for more. China is paying more for our oil and cotton. We are paying the Chinese less for the toys and clothes. Australia is turning a profit!
For most of our short (two century) history, Australia has seen its “terms of trade” (what we buy compared to what we sell) going slowly down… We were always buying more than what we sold. Poor little Australia, way down there, away from our colonial cousins. You could almost feel the pity as the foreigners paid us for our exports, and then took back all the money (plus more) as we imported everything we needed.
Foreign accounts (Australia’s overdrafts) are now getting less, as we pay off more debt. The sale of some of our assets (eg. Telstra) has also helped to pay down debts owed to others, thus saving us interest payments. Now in 2005, for the first decade since 1788, we are cashed up and profitable, taking in more than we send out… Australia, stand up proudly as the rest of the world increases its debt. Australia: still the best, and getting even better!
America owes trillions to China, India, the Middle East and Russia (the USA owes over $500 billion to China alone…see “INVEST News” #32, November 2004 or ask me for a free back copy). If you were looking at businesses to buy, would you choose the one with massive debt that was spending more than it had coming in (compare the USA)? Or would you buy the business with low debt, decreasing debt and making more in the front door than it lost out the back (compare Australia)?
Australia, take a bow. Not just a great place to live, but growing in economic security. Buy some Aussie shares or Aussie Government Bonds now, then sit back & relax!
Of course, to find out which shares, bonds and properties to buy, it would be prudent to speak to an expert in the field. A great way of investing into all of these areas is by utilizing a quality managed fund with exposure to many different assets.
Instead of piling it all into one area, spread your money around like topsoil and it will grow.
Take care of your money and it will take care of you.