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Beware the online scams from spam emails and robot trading

ANYONE who hands over savings to people who send spam emails and employ robots to make quick profits is throwing money away, writes BAREFOOT INVESTOR.

CAREERONE .. generic photo illustrating organised email
CAREERONE .. generic photo illustrating organised email

BARRY WRITES: I receive many emails from binarybook.com. These online traders use robot trading and seem to make quick profits. I am intrigued because I am 62, self-employed and need $250,000 fairly quickly or I will have to sell my new home in Bayside for an ordinary property in a lesser-value area. Binarybook.com requires an upfront fee to begin trading, and it says it needs five days’ notice for me to withdraw profits. My question is, do I pay tax on these gains?

 

BAREFOOT SAYS: Some people just aren’t suited to being on the internet, and Barry, I think you’re one of them. However, let me answer your question. Yes, you will pay tax on your gains: it’s called a “stupid tax”, and it’s levied as high as 100 per cent on anyone who hands over their money to people who send spam emails and employ robots to make quick profits.

 

A SUPER FUTURE

TENNILLE WRITES: My husband and I, both 28, make $120,000 per year combined. We have about $45,000 combined in super, with no other savings. We have a mortgage of $235,000, which we will pay off by the time we are 40. No other debt. After all expenses there is about $1500 per month left over. I’ve just worked out how much we need to retire at 65 ($1.5 million) and I’m freaking out. How can we best use that $1500 per month without crushing our cushy, latte-sipping lifestyle?

 

BAREFOOT SAYS: I hope you both realise just how weird you are. Seriously, most people don’t work out what they’ll need to retire until they’re in their late 50s. With foresight like this you guys are going to be fine — there’s no reason to freak out, and no reason to give up your latte lifestyle. Let me show you how you can turn $1500 a month into close to $5 million of assets over your working life, so that you’ll never have to worry about money again (unless you have kids, then you’ll have to work a little harder).

Here are three goals for your $1500 a month: First, save $500 a month into your mojo bucket, with the aim of building it up to $15,000. Second, boost your super from your employers’ current payments of 9.5 per cent to 15 per cent, via salary sacrifice. That (roughly) works out to adding an extra $251 a month each. Just doing this will boost your collective balance by an extra $500,000 — and you’ll retire with about $1.7 million. Third, pay an extra $500 a month off your home loan. That’ll knock 10 years off your mortgage and save you $80,000 in interest.

Done and dusted? No. Let’s keep working this plan through. Once you’ve reached your mojo target, redirect that $500 and pay it straight off your mortgage. Once you own your home outright in (less than) 10 years, redirect your mojo money, your extra mortgage money, and your regular monthly mortgage repayments into a low-cost listed investment company. Over 25 years that’ll give you an extra $3 million that you can access without the age restrictions affecting super. How cool is that?

 

CUT AND RUN

PHIL ASKS: I have approximately $20,000 invested in Australian Unity capital guaranteed bonds, and have often thought that my money could be doing better elsewhere. I now want to do something about it and wondered what you might suggest. On the receipt of my last statement from Australian Unity they included a card offering me the chance to participate in “Series B Australian Unity Bonds — Tranche 1”. I’m wary, based on the earnings of my current bonds over the past years. What would you suggest?

 

BAREFOOT SAYS: Capital guaranteed bonds? Nasty stuff. Just awful. The financial equivalent of a Shania Twain greatest hits album. I presume you signed up with the help of a friendly financial flogger. I can see how it made sense to them, but not for you, though. I’ve looked at different capital guaranteed bonds in the past, and after fees and taxes they’re lucky to net a return of 1 per cent. And here’s the kicker: these bonds aren’t protected by the government’s deposit guarantee, like say a UBank 12-month term deposit, which currently pays 2.85 per cent. Depending on exit fees, it’ll probably be best to wait until it matures — then dump it.

 

TO STAY OR GO?

NICK ASKS: I’ll keep it short and simple: is it worth holding on to Telstra shares?

 

BAREFOOT SAYS: There are a lot of grey nomads who are dirty on Telstra right now, with the shares slumping about 15 per cent from their peak in February. Let’s get some context, though. Since 2011, Telstra shares have been a darling with retirees: as interest rates have been cut to bugger all, they’ve treated the stock like it was a high-interest savings account. Not only was it paying a juicy dividend, but the share price rocketed to a 10-year high of $6.74. And then the high-interest bank account started behaving like a business: Telstra admitted it was facing tougher competition in the mobile space, which may trigger a price war, which may impact profits in the short-term. Then the new CEO, Andy Penn, announced he was expanding Telstra into Asia and investing in e-health (instead of giving that money to shareholders), with the aim of creating one of the world’s best technology infrastructure businesses. Actually, I rate Penn highly, and believe he’ll ultimately be vindicated with his investments. It’s a smart move, and positions Telstra perfectly in the world’s fastest growing region. So here’s the bottom line: Telstra is a business with huge cash flows, a strong dividend, and an ambitious growth plan — but it’s not a savings account.

 

IF you have a burning money issue, or want to win a fight, put your questions to Barefoot Investor. The Barefoot Investor holds an Australian Financial Services Licence (302081). This is general advice only. It should not replace individual, independent, personal financial advice.

Originally published as Beware the online scams from spam emails and robot trading

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Original URL: https://www.dailytelegraph.com.au/business/beware-the-online-scams-from-spam-emails-and-robot-trading/news-story/6fcf6395334361d72afc113ec6b592d3