The Time Has Come (the Walrus said) Archives

Super idea… not!

Like many employees of big companies, lats year I took up the offer of buying shares in the employee share plan. Bear in mind, though, these are not Australian shares, they are for a large foreign company and are listed on a large foreign stock exchange. So DOING anything with the shares is difficult at best, but they are also locked away for 5 years anyhow. To add insult to injury, the price dropped 20% just after the allocation day.

Then the other day I got talking to my accountant. He pointed out, quite rightly, that this is madness.

The shares in the employee plan are paid for, by me, from my after-tax salary.

I could salary sacrifice a superannuation contribution from my pre-tax earnings and the benefit would be far greater.

For the sake of illustration:

- Lets assume I’m on the 40% marginal tax rate

- Lets assume I purchase $5000 in shares.

That $5000 comes from my after tax salary, so I had to earn $5000 / 0.6 = $8333.

And any earnings from those shares are also taxed at my marginal rate of 40%.

Now assume instead that I make a salary sacrifice into my super fund. The contribution tax is 15%.

So to get the same DOLLAR VALUE INVESTED, I need to salary sacrifice $5000 / 0.85 = $5882 (this puts $5000 after contributions tax into my super account).

And seeing as I did a salary sacrifice, my pre-tax income dropped by that $5882, meaning I don’t pay tax on any of that money. So my tax bill will reduce by 40% of $5882, or $2352.

Another way to look at it: I could instead contribute $8333 from my pre-tax earnings (the drop in my take-home would then be the same as buying the shares in the employee share plan). I’d lose 15% of that amount in contributions tax (leaving me with $7083 added to the fund). So my INVESTED VALUE is over $2000 MORE. Considering we started with the proposition of making a $5000 investment, the benefit of a pre-tax contribution to super is giving me $2000 more to invest!!

The effect of a salary sacrifice into super is dramatic: you pay less tax, the amount of money you can set aside for your dotage is significantly higher. For the rich folk on the higher tax rates, the effects are even more pronounced.

Looks like the employee share plan kind of sucks, really.

Odds-n-ends

Remember the terrible and untimely death of our family member, Mr Washing Machine?

After much delay and futzing around, the oldest son has finally taken it him apart. A consequence is that we have solved the mystery of where the big lumps of “scale” came from. Not scale at all.

It turns out that the washing machine is made of an inner bowl, and and outer bowl (no surprises here, they’re all made that way). Both of these are plastic – polypropylene. And they are both remarkably clean. A bit of grot here and there, but not too bad. No scale. The big grey lumps were aluminium.

The machine is made with a huge big aluminium casting used to connect the inner bowl to the shaft that’s used to spin it at great speed, and that casting has been in detergents and water for years and years. Hot water, detergents, dirt… all corrosive. And corrode it has.

So the big lumps were parts of the aluminium casting just corroding and falling off.

Here are the remains, the casting is that big brown/grey speckled thing:

dscn2829.JPG

So much for my nagging suspicion that it could have been repaired. No chance. Once upon a time that casting would have come off to allow replacement. The only way we got it off that central shaft was to cut it off with an angle grinder.

——————

Word of the Week.

In other news, the chaps have decided on a couple of COOL WORDS:

Oldest chaps word: INSOMNIAC.

It’s very bizarre to go wandering somewhere around the house, and have a teenage kid shout “Insomniac” at you as you go past. Ditto for exclamations whilst playing table tennis. He likes it because it sounds good.

The youngest, with a bit of helping, has decided that KLEPTOMANIAC is pretty good, but KLEPTOCRACY is even better. (As in, perhaps the tax office is a Kleptocracy).

Which all reminds me… years ago in a former job we had a bunch of people come in to do an audit. Not an accounting audit, a different type. Not just one auditor, either. There were about 6 of them, for a week. I needed to find the collective noun for a group of auditors. Then I hit on it: EXCRESENCE.

As in “An excresence of auditors”. :)

Jazzed!

We’ve spent the afternoon… well, nearly all of us have, ‘cos SWMBO came down with a migraine and could not make it… so… MOST of us have had an afternoon of Jazz in the backyard.

Once or twice each year, David and my-distant-relative Val host a Jazz afternoon in their backyard, under the giant pergola. A few measly dollars gets lunch, desert, and 3 hours of cool Jazz.

They have been doing this for about 5 years now, but we’ve only managed to get along to two – today being the second.

Today was perfect – 25 degrees, a few clouds, a lot of sunshine and The Adelaide Jazz Trio with Jazzbird (Wendy McPhee).

(And seeing as I forgot to take a camera, as soon as David emails me the photo I’ll add it here. Check out the location: nice paved area under the pergola, the trees in the background…)

How the fellows managed in their dinner suits is beyond me. It was warm! But I suppose they are COOL dudes. Especially the drummer, who was so cool he had his sunglasses and a yellow fishing hat on. A perfect match with the dinner suit!

Seriously though, these folks are very good. Wendy has a bunch of samples on her site, and I should have bought a CD while I had the chance. Check the samples!!!!

For the real Jazz fiends, they play most Friday evenings at the Hyatt in the Atrium Cocktail Lounge.

We’re a bit fired up, the chaps liked a lot of what they heard. And seeing as the guy teaching them piano is himself doing a degree in Jazz Piano, it seemed timely: as he learns things, he’s getting the chaps to do the same kind of things. They are getting all sorts in piano lessons – traditional by-the-rules, and the more easy-going Jazz styles. We promptly came home and PAID to buy the sheet music for Moon River – might as well get in while they are keen, and they liked this one especially. Reminds me, must get and watch Breakfast at Tiffanys sometime. Also reminds me… how the heck can music publishers REFRESH the copyright? This seems completely wrong.

How would you kill the planet, Plague or Global Warming?

With all the daily fuss about Climate Change (aka Global Warming), a contributor has sent in these thoughts about Global Warming, or other terrible ways of wiping out civilization.

——————

Remember (for history lessons) the Plague that swept through Europe and Asia in the mid 1300’s? The world lost about 20% of its population, some countries lost about 50%.

Wikipedia, on the Plague, quotes mortality thus:

In septicaemic plague, there is bleeding into the skin and other organs, which creates black patches on the skin. There are bite-like bumps on the skin, commonly red and sometimes white in the centre. Untreated septicaemic plague is universally fatal, but early treatment with antibiotics reduces the mortality rate to between 4 and 15 percent. People who die from this form of plague often die on the same day symptoms first appear.

The pneumonic plague infects the lungs , and with that infection comes the possibility of person-to-person transmission through respiratory droplets. The incubation period for pneumonic plague is usually between two and four days, but can be as little as a few hours. The initial symptoms, of headache, weakness, and coughing with haemoptysis , are indistinguishable from other respiratory illnesses. Without diagnosis and treatment, the infection can be fatal in one to six days; mortality in untreated cases may be as high as 95%.

Now all of this seems to be a much more likely way of the world controlling the population than death by global warming etc. It seems that you need virtually instant access to the right antibiotic of you are dead within a day. Now that really is scary.

Rubbish-bin laden

Some time ago our local council forced us to change to split bins for the rubbish and recyclable pickup.

The arrangement is a single wheelie bin with a divider down the middle, rubbish goes on the right, recycling on the left. During pickup the two sides fall either side of a divider and the truck has two compartments.

Much wailing and gnashing of teeth ensued, especially seeing as the same council had previously forced us to purchase a standard wheelie bin (sans split), and had issued recycling crates.

We still have that damned black plastic recycling crate. They didn’t want to take them back when the new split bins were introduced.

ANYHOW, in that last couple of days they sent to all households a booklet, about where the rubbish goes and HOW to put stuff into the (split) bin.

bin1.jpgOn the front cover, this nice picture:

Notice anything?

Look hard now (and read above for a hint).

Still looking?

Well…

Look at the label on the drink bottle… and… WHERE is the drink bottle?

The recycling is supposed to be on the left, not the right.

Somebody put the image in upside down and didn’t check the artwork.

Proof, if you need it:

bin2.jpg

Bet somebody is going to feel pretty stupid about this one. They just sent out about 120,000 copies and they show how to load your bin backwards!

(All photos inside are shown the right way around, but this is the photo on the front cover. Kinda prominent.)

No goats or other animals were harmed in making this post.

How to tell if in management

Once upon a time, in a nice little forest, there lived an orphaned bunny and an orphaned snake.

By a surprising coincidence, both were blind from birth. One day, the bunny was hopping through the forest, and the snake was slithering through the forest, when the bunny tripped over the snake and fell down.

This, of course, knocked the snake about quite a bit. “Oh, my,” said the bunny, “I’m terribly sorry. I didn’t mean to hurt you. I’ve been blind since birth, so, I can’t see where I’m going. In fact, since I’m also an orphan, I don’t even know what I am.”

It’s quite ok,” replied the snake. “Actually, my story is as yours. I too have been blind since birth, and also never knew my mother. Tell you what, maybe I could slither all over you, and work out what you are so at least you’ll have that going for you.”

“Oh, that would be wonderful” replied the bunny. So the snake slithered all over the bunny, and said, “Well, you’re covered with soft fur, you have really long ears, your nose twitches, and you have a soft cottony tail. I’d say that you must be a bunny rabbit.”

“Oh, thank you, thank you,” cried the bunny, in obvious excitement. The bunny suggested to the snake, “Maybe I could feel you all over with my paw, and help you the same way that you’ve helped me.”

So the bunny felt the snake all over, and remarked, “Well, you’re smooth and slippery, and you have a forked tongue, no backbone and no balls. I’d say you must be either a team leader, supervisor or possibly someone in senior management.”

Powered by WordPress 2.8    Rendered in 23 queries and 0.581 seconds.    CleanBreeze Theme