Your sneak peek at the May issue of Money magazine



This month's cover story explores the power of investing $5000. It may not sound like a lot but you may be surprised just how well a wise investment of $5000 can perform. If you had invested $5000 in two well-chosen exchange traded funds (ETFs) in 2010, your investment could be worth almost $8500 now - a return of nearly 70% over five years or about 11%pa. Money has come up with 15 smart ways to harness the power of $5000 including ETFs, shares, managed funds, forex and gold, renting out a room, peer-to-peer lending, investing in collectables and more. Plus we asked experts for their tips on the best specific investments for each option and the potential return.


Here's a snippet of what's in the May 2015 issue of Money magazine

As many as one in three parents help their children with a home deposit. But some parents lie to lenders about whether the money has been gifted purely to circumvent the lender's criteria in order to get financial approval. However parents need to be aware of the consequences, particularly if it's expected that money is to be repaid even though you've signed documentation stating your money is a gift and it is not expected to be repaid. Any number of things can jeopardise your share of the funds, including relationship breakdowns. But there are ways you can help your children buy a property without risking your funds. Money poses a number of options.


Did you know that baby boomers own the bulk of the nation's personal wealth? And unfortunately our population is ageing. So you'd have to think healthcare stocks focused on the seniors sector will be long-term winners and a sure bet when it comes to investing. But don't forget, also high on the list of needs and wants for baby boomers is travel, wealth management, insurance and essential services. Money reveals a number of stocks such as Flight Centre, Perpetual, Invocare plus more that are predicted to benefit from a growing population of cashed-up retirees.


You've probably received cold calls from insurers asking whether you're interested in purchasing funeral insurance. Of course like any insurance, you can never predict when you'll need it so it pays to sit down and work out your options. One particular policy Money researched revealed that if you had purchased insurance under the standard option and the funeral was in 20 years, the over-65 year old consumer would pay $27,252 in premiums for a $15,000 funeral. Money explains the pros and cons and the ins and outs of funeral insurance.


When talking about shares, you've probably heard the adage, "Sell in May and go away". It's an old proverb developed when the English aristocracy were the only people who could afford to trade shares, implying you sell your shares before the summer social season started in May. But is it a custom that modern day shareholders should practice? Money examines the share price over the past 75 years leading up to May and reveals whether this advice still stands or not.


Online retailer launched Kogan Pantry in January, offering consumers more than 600 supermarket items. At the time of launch, Kogan executive director David Shafer told business website SmartCompany that its products would be up to 90% cheaper "than the giants of the industry" and a typical shopping basket would save consumers 50% plus. So, compared with Woolworths and Coles, are Kogan Pantry items as cheap as Shafer claims? Our numbers show they are, but why? Parallel imports. Are parallel imports a good or bad thing? Money investigates.


With the property boom on one hand and the price dip in iron ore on the other, investors live in interesting times, says Paul Clitheroe. But diversification is the key to protecting our assets and income. "Like many Money readers I own a home in a big city, in my case Sydney. That is a positive - it is my home and not an investment but better it goes up in value than down. I have money in the banks - not so good, with falling interest rates. I have super, with pretty much a balanced portfolio. This will contain good stuff, like banks and industrial stocks; not such good things, at present anyway, like resource stocks; and also overseas shares and fixed interest, which is doing well. Add the whole lot together and, like most people, I have a mix of winners and losers; overall I am doing fine."


Brent is 33 and has two jobs with a combined salary of around $130,000. He has an investment property doing quite nicely and valued at $635,000. He's just purchased a property for $651,000 and rents it out for $750 a week. He also has $18,000 sitting in an offset account. While these two investments are fine, he struck trouble with his shares in the GFC due to a regrettable margin loan and has not been able to work his way out of it. He has a $130,000 loan against his parent's house (a GFC bailout), a margin loan of $116,000 (the shares are worth $100,000 and his dad's CBA shares are security) and has almost $1 million borrowed against the properties. He's trying to attack the margin lending first as that attracts the highest rate and sell shares if possible. The shares are Atlas, QBE, Hillgrove Resources, RNI and Nkwe Platinum in order of value. How can Brent get out of this financial mess? Paul delivers his verdict.


Once a member of a self-managed super fund (SMSF) hits preservation age, they should check if a transition-to-retirement (TTR) pension strategy is worth pursuing. It can save tax and boost super. At 60, the benefits are more compelling. The TTR pension was introduced to help people in the lead-up to retirement cut down on work hours and supplement their pay with a pension income. Previously you could access super only at 65 or retirement. But many people use a TTR pension to minimise tax and boost super while working full time. Money explains how this strategy works and how to go about it.


"As the federal government talks about changing the tax system - but shies away from comprehensive change because it fears a political backlash - it is worth reviewing your motives when investing. Tax is a consideration but concessions are no reason to make an investment. The greater priorities are the after-tax return and the risks you take to achieve it. " New tax reforms shape our behaviour with its incentives, writes Ross Greenwood


The best thing about running your own business is that you get to choose which 16 hours of the day you work, a dapper Craig Withers confided to the audience at the ritzy Telstra Business Awards function in Melbourne late last year. He got a big laugh. But his speech wasn't all upbeat; at times his voice shook and he verged on tears - and who wouldn't have been emotional? Withers' company, Urban Escape, a high-end Melbourne hair and beauty salon, had just been named Micro Business of the Year. "It's impressive," said the judges. "He focuses on the complete customer experience, integrated service delivery and re-conception of what a great hairdressing business can be." An award-winning hairdresser has shown that thinking big pays off in small business, writes Deborah Light


  • Money's Reader offer: Smart ideas for the home. Get a free ticket to the HIA Sydney Home Show at The Dome, Sydney Showground, Sydney Olympic Park from May 28 to May 31. You'll find hundreds of new ideas to renovate your house, both inside and out. Save $20!
  • Book of the month: Money, marriage and divorce by Paul Clitheroe
  • Subscribe or renew your subscription to Money and a free book - Bruce Brammall's Mortgages Made Easy worth $29.95 RRP. Offer ends June 3, 2015.
  • Money's Letter of the Month gets a 12 month subscription to Money magazine.

All this and more in the latest issue of Money Magazine.


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