Close watch on future

FUTURE’S CALLING

MY iPhone is basically my office — it’s where I do business.

In contrast, we got a “burner” phone for my 60-something farmhand Archie — this is not where he does business.

He often shoots me blank text messages, and when he does work out how to reply it’s often IN. FULL. CAPS.

Now, unless you’ve been labouring away in a paddock in Romsey, you’d know that this week Apple had a big event.

I dutifully got up early and watched it, and in the process saw why Apple is the most valuable company in the world (and on track to becoming the first trillion-dollar company — for reference, the entire ASX 200 is valued at $1.3 trillion).

It droned on for two bloody hours, though you wouldn’t know it by looking at the nerds in the crowd who were absolutely losing their Samsungs at all the new — and insanely expensive — kit!

Enough! How many more pixels do you need till your life is complete? Does the sliver of extra screen around the edges justify an $1829 price tag for the top-of-the-line iPhone X?

Or maybe it’s that you can use Apple’s (slightly creepy) face-scanning feature to turn yourself into a poop emoji?

However, there was one product that I think could be the next big thing: the latest Apple Watch.

The new version has its own SIM card, which means you won’t even need to lug your iPhone around.

Hell, even I’m thinking of buying one. After all, I’m a big user of Apple Pay, via my ING account. That means I’d be able use my watch for purchases, without my wallet or phone (or shoes).

Even better, the watch takes calls, right on your wrist, just like Dick Tracy.

I’m thinking about getting one for Archie. It’s even waterproof, which will help when it’s calving season.

Tread Your Own Path!

DO YOU TAKE THIS ...

KELLY ASKS: We are getting married in June 2018. Planning ahead, I’d like to know what tax implications there are after we get hitched. We are both 27, I earn $64,000 pa and he earns $74,000 pa. We keep our finances separate and plan to do so until the marriage (though we have joint savings for the wedding, which will be spent). BAREFOOT REPLIES: Congratulations. You are the first bride-to-be to ever put “tax planning” on their to-do list.

Bridesmaids’ dresses? Check. Flowers? Check. Tax implications of nuptials? … Email the Barefoot Investor.

OK, so the big change is an administrative one: once you’re married, you’ll need to record on your tax return that you have a spouse, and include his taxable income. (And your spouse will have to do the same on his tax return.)

Why? Well, it’s part of a reality show the ATO is pitching as a rival to The Bachelor (“You Told Me You Earned $200k!!”)

OK, so that’s not true. The ATO needs your spouse’s income to work out if they can slug you with extra tax (couples without private health insurance earning over $180,000 combined will be hit with a 1 per cent Medicare Levy Surcharge, rising to 1.5 per cent for couples earning over $280,000), and also to work out any family tax benefits.

(Interesting factoid: even though our pollies are spending $122 million on a postal vote to decide on same-sex marriage, the bean-counters at the ATO are much more liberal: they define a spouse as being either a registered partner or a de facto, so you may be doing this already.)

There are a few other implications: THE GOOD: You can split your (non-salary) income with your spouse, so always invest in the lower-earning spouse’s name. THE BAD: If you both own a home, you have to choose (or apportion) which one gets the capital gains tax (CGT) exemption. Talk to your accountant to crunch the numbers if you’re in this situation. THE UGLY: Outlined on recent reality show Seven Year Switch on Channel 7.

Congratulations!

TWO BROKE GIRLS

ANNIE ASKS: We are two mothers — a couple wanting to have a baby.

We read your book and have started implementing the strategy. The trouble is, I have never wanted to have kids until I had enough money, but my partner wants them as soon as possible.

We both work, but have next to no money. I thought you may be interested in a same-sex couple. We, too, have financial troubles. BAREFOOT REPLIES: On one hand, you wouldn’t be the first broke parents to decide to have a kid.

On the other hand . . . what the bloody hell are you thinking? Look, I don’t care if you’re gay, straight or polygamous — you need to take responsibility for your financial situation before you can take on the ultimate financial responsibility of having a child.

You’ve read the book, so you’ve got your road map — now it’s time for wine, garlic bread … and action.

A SUPER PLAN

NATALIE ASKS: My husband and I are both 40, have two very young girls, and have owned our home outright for three years.

We are now down to one wage ($100,000), but have also managed to also put away $90,000 in savings. With an eye to growing our wealth, we have borrowed to invest in shares — on the advice of our financial adviser.

But we are worried that the interest each month is less than the dividends received, and think we could have been saving this money instead and investing our own cash. What is your take on this? BAREFOOT REPLIES: Getting the banker off your back is the best thing you could have done for your family. Well done! You’ve got the one character trait that almost no broke people have: a savings mentality.

The strategy your financial adviser has you on is negative gearing (in this case shares, not property).

And while the gains from borrowing to buy shares can look awesome on a spreadsheet, the truth is that most people don’t have the ticker to stomach a stock market crash with borrowed coin.

There are two major purchases that money can buy you from hereon out: the financial security of never having to worry about money again, and the freedom to spend time with your family and friends. Here’s how to achieve them:

First, save up three months of living expenses in a Mojo savings account.

Second, max out your pretax super contributions of $25,000 each year. That’ll give you both a tax deduction and a secure retirement. If you go back to work, do the same (that’s $25,000 for each of you).

Third, set up a long-term share investing program to fund your kids’ education, awesome family adventures, and weird hobbies. Invest in the lower-earning spouse’s name and, if you’re a nervous investor, do it without debt.

HEIGHT OF SUCCESS

JACK WRITES: I just wanted to say thank you for your book. Your advice has pulled me through some uneasy times and, in October this year, I am set to build my legacy … by climbing Mt Kilimanjaro solo to raise money for the Cancer Council. You have taught me that spending my hard-earned money on giving back and helping others is so rewarding; I see it as a reward for finding financial control.

Know that, as I reach the summit with my Cancer Council flag in hand, it was funded through the advice you provided, and that I will raise a beer for you — if I can sneak one to 5895m! BAREFOOT REPLIES: Well done, Jack! The beer will be nice and cold at that elevation.