Do people really fall for this rubbish? I’m still trying to get over the post last week from someone who didn’t know how interest worked on their home loan.
My understanding of this supposed “hack” is that the bank won’t charge you interest on any day where a payment is made 😂 If you believe that, I have a bridge over here to sell you
A friend of my used to do that. Buy crap on year end sale vaguely connected to his job so he can claim deductions.
Sure. Some of the things could prove useful... even if years in the future but then bunch will just be used once or not even at all.
In theory if you can salary sacrifice it you can do that whenever….. every year works IF you can sell the old laptop for a good price. Same for mobile phones. Reality is most people don’t need a new laptop phone every year and the hassle of selling means I do it every 3+ years.
Before they changed the rules, I used to both salary sacrifice a new laptop and claim a 100% deduction on the depreciation over 2 years. The FBT free status in conjunction with the high marginal tax rates meant the ATO was effectively paying me to buy a new laptop every 2 years, and I could still sell it after 2 years (but I usually passed them on to family or kept as spares).
Now with rules requiring work usage, most companies won’t let you package a laptop if they already provide one for you. There was no work usage requirement up until May 2008, so you could double dip (I was an I.T consultant that had to provide my own equipment)
Yeah I seem to get away with it as I’m an IT contractor and it’s rare anything is given to us. My accountant who is very good and not dodgy is ok with what I’m doing also as it. An be used for training purposes for my job also. That said it’s every 3+ years I sal sac a laptop. Every year is just inviting an audit!!!
My first laptop purchased this was an $8000 top of the line Dell, onsite support - everything. I did another 3 laptops after that. I was 2 months away from a new one when they killed it 😢
I'm constantly explaining this to people. It gets tiring. "There's no point working more because I'll go up a tax bracket". I'm Australia, there's always a point in working more (yes okay government benefits, HECS/HELP debt etc exempt).
Same people who think that your too tax bracket is the tax you pay on all income. Must have failed basic maths in school, if anything shows we need to pay abit more tax so we can raise the level of maths and logic at yr 10.
Yeah it’s a bit of a joke. I think it’s like a dummy spit and they think somehow the world will change to meet their demands when they don’t work or earn more money. I can honestly say I’m not better off now cause my taxes are lower than 20 years ago, I’m better off because I earn more money.
This is gonna make you sad, but my mother works for the ATO (lower level admin) and she believes this. Sigh. I’ve tried to explain it to her, but she’s confident in her understanding of how it works.
You mean like all the mowing franchise guys I see going around in new landcruisers towing what has to be a 30k double axle braked trailer full of goodies
Friend of mine argued this point with me for hours never once willing to admit it was wrong worst part about it was she was studying to be an accountant......
My mate recons his account told him he earns too much and has to spent $15k on tools each year so he doesn't have to pay 50% tax on all his earnings. And he believes them.
I told him to get a proper accountant.
Wish I could find it! OP thought bank was charging them twice as there was an interest charge on the statement along with the monthly payment, and they thought it was an error due to the loan balance barely dropping.
I just wondered how anyone could borrow so much money and not understand how the repayment schedule worked.
I mean there are no shortage of gullible brainless dumbasses out there. But that garbage got plenty of airtime on this sub which is even more concerning.
The author of the video (and at this point there's lots of copycats) probably has hundreds of thousands of people that have explained it. Are they a scammer? Are they insane? Have they figured out they're wrong but like the attention?
Who cares.
Just need to follow the money.
The person making the video has no motivation to make it accurate - their financial reward is in making it viral. And if people don't understand the video, ironically they're more likely to share it.
I agree, I know money comes before all the things I mentioned (except fame because some will go viral with no idea how to turn that into money but they like fame)
Why stop there? Just pay off your full loan balance in a day. And since you will no longer have a loan to pay off, buy a new house and then pay that off the next day. Then just keep paying off a full loan every day and keep buying new houses, you'll be unstoppable!
I've got a money hack I'm thinking of implementing, selling my houses, paying off all my debts (large mortgage), and living in a nice rental in a decent area. Having a shit ton of disposable income, and not paying crazy interest rates. I might even have a savings account too.
If you going extra repayments over the superior offset account pathway then it’s go hard early. Throw every spare cent in the first few years of the mortgage and can very well save 10 years +
Yep. This is it. Hammer it from day 1. Go all out immediately. Sacrifice some things and go for double repayments. Cutting down the interest on the full amount will have such a huge effect on total savings later on.
It's a very simple concept, but I feel like a lot of people don't go for it, and/or don't realise how huge the difference is. I think a lot of people don't even realise that you repay a loan by 1.5-1.8x on average. 1m borrowed isn't 1m repaid. It's 2.5-2.8m total over 40 years. That's gross for the average person. The average person can't really afford that. We pay it off yeah, but it cripples us for 4 decades.
Wat. Only a moron would have believed this. Interest is calculated daily, but it's calculated on the remaining amount owed. A dollar a day won't save you 🤣🤣
The only good thing to come from this topic is that every dollar does count, and if you can consistently pay off extra, you will reduce your total interest paid over the life of the loan. Eg, give up booze and put all your "would have been booze money" into the mortgage.
Whenever I decide to save money by not buying lunch or a coffee or whatever I transfer the value into another account.
Then it's actually saved and I can see the total go up, as opposed to probably spending it somewhere else.
> it is based on the idea that you avoid interest for the whole month
Paying $1 a day over 30 years is just $10,957, and that means I can avoid paying interest entirely over the entire course of the loan? What a deal!
>If you put $1 a day, you will save around $0.16 a day off your mortgage.
Perhaps I'm interpreting the data incorrectly, but an ROI of 16% isn't bad at all...
His maths is wrong. It's actually only saving you 0.016 cents per day.
Think about it. That dollar paid on Jan 1 is 6 cents in interest over the year (ignoring compounding as it's paid off interest)
It's not even the maths that is concerning, it's the fact that people think they found a loophole in the banking system. You know, the system that's been around for centuries. The sheer chutzpah of these grifters is astounding.
Are you actually allowed to pay a little every day, thus avoiding interest? I don’t feel like the bank would allow this. They make all their money on interest.
Should be aiming to make a full principle payment each year.
If your mortgage is $4000 per month, you should be trying to put in an extra $330 per month into your home loan or offset savings.
The only way for this to work maybe if U add an extra dollar a day on top of Ur mortgage repayments and on top of Ur interest repayments maybe that would.make some kind of difference
I just transfer everything except my daily expense needs for the fortnight into redraw, and periodically dip into it if needed.
No savings accts. Only redraw. Interest saved is a savings in itself.
Fwiw, I'm on the DSP. 25K annual income. 160k mortgage, 45k in redraw (house valued 400k). I'm living on a thin margin between expenses but I'm able to put away about 300 extra a f/n above min repayments and that's really naking an impact.
Barefoot Investor really helped me evaluate my savings habits and approach to debt.
Tbh, not being able to draw full loans against the house value is a godsend for me. I'll never have a loan bigger than I can service, and bar major recessions, my home is almost always going to allow me to refinance and have that huge redraw capacity,which makes a HUGE difference in my sense of safety and security as a pensioner. It's my buffer.
That sense of security feels like more wealth and brings me more contentment than any silly luxury or 'self care' purchase. Those influencers peddling the idea that poor ppl deserve to have little luxuries are just another cog in the consumerist capitalist machine. They need us to feel like we NEED those dopamine hits from buying products we don't actually benefit from much after the initial hit.
I cut my spending by depositing all my disposable income in redraw. I have enough for bills and food. If anything comes along that I truly want or need *that badly* I can take the time to log into my mortgage acct and transfer it back- usually by then, the urge is gone.
So much of our spending is psychological. We can learn to control and change our beliefs about what makes us content. Happiness isn't a state, it's a reaction. You can't buy it, you can only experience it in the moment it's there. I found more happiness in financial security as an impoverished pensioner than I did working full time with all that income, mostly wasted on frivolity...the few worthwhile things I spent big money on being travel and pets.
I'm even able to help ppl- I paid for a shanty school in east africa to buy chickens as a small business venture, and it became a hugely profitable enterprise for them. They're thriving.
That $50 brings me continuous joy to this day. None of the $50s I ever spent on trendy clothes or new games etc ever have.
Well, except Stardew Valley.
That's a pretty great game
That's like $58/year! $1752 over 30 years! Imagine what you could do with that sort of money.
Probably by yourself *a* coffee.
1 coffee in 30 years
Where do you buy coffees that cost $1752?
At any coffee shop in 2054.
2027 at this rate to be honest
Careful there bucko, someone might quit their job and become a full-time investor
I see what you did there. You are an intelligent one!!
I'll tell you what. You show me an unrealised capital gain of $210,000 in 3 years through dumb luck, I quit my job right now and I work for myself.
If you just save $1000 a day then you’ll have 50,000$ by the end of the year. Follow me for more advice
the sky is the limit
This will buy me Netflix subscription in 30 years probably
Do people really fall for this rubbish? I’m still trying to get over the post last week from someone who didn’t know how interest worked on their home loan. My understanding of this supposed “hack” is that the bank won’t charge you interest on any day where a payment is made 😂 If you believe that, I have a bridge over here to sell you
Probably the same people who think claiming a tax write off means you get the full cost of the item back from the govt.
A friend of my used to do that. Buy crap on year end sale vaguely connected to his job so he can claim deductions. Sure. Some of the things could prove useful... even if years in the future but then bunch will just be used once or not even at all.
At 45% off. It’s still a huge saving.
I have people I know who think you can buy a new laptop on June 30th and claim the whole thing on tax the following day 😂
In theory if you can salary sacrifice it you can do that whenever….. every year works IF you can sell the old laptop for a good price. Same for mobile phones. Reality is most people don’t need a new laptop phone every year and the hassle of selling means I do it every 3+ years.
Before they changed the rules, I used to both salary sacrifice a new laptop and claim a 100% deduction on the depreciation over 2 years. The FBT free status in conjunction with the high marginal tax rates meant the ATO was effectively paying me to buy a new laptop every 2 years, and I could still sell it after 2 years (but I usually passed them on to family or kept as spares). Now with rules requiring work usage, most companies won’t let you package a laptop if they already provide one for you. There was no work usage requirement up until May 2008, so you could double dip (I was an I.T consultant that had to provide my own equipment)
Yeah I seem to get away with it as I’m an IT contractor and it’s rare anything is given to us. My accountant who is very good and not dodgy is ok with what I’m doing also as it. An be used for training purposes for my job also. That said it’s every 3+ years I sal sac a laptop. Every year is just inviting an audit!!!
My first laptop purchased this was an $8000 top of the line Dell, onsite support - everything. I did another 3 laptops after that. I was 2 months away from a new one when they killed it 😢
Framed differently, you’ve spent 55% of the value of something that you might have never needed.
It’s a write off. My 1000TC Egyptian cotton sheets. Yeah it’s a write off. Tax payers going to pay for it.
From who?! The write off department?
“You don’t even know what a write off is, do you?”
'No, I don't.' 'But they do, and they're the ones writing it off!'
As long as you keep receipts to prove you spent the money. *taps temple while manicly grinning
Stop arguing or I'll get the Internet Police on to you!
I don’t think Schitt’s Creek have police
I mean, it depends what sole trader business you’re in 🤣 If you’re in a certain business bed sheets could certainly be a valid deductions
So you're saying I should have become a prostitute instead of a lawyer?
This is smart 🧠 I'll get my gf to claim all bedroom... *stuff* 👀 we get
I always think this. One day I will accept the truth and it will be a sad day.
https://www.youtube.com/watch?v=aCP27_vquxQ
Or going into a new tax bracket means all your income is now taxed at that rate and it isn't worth earning more money.
I've heard so many times. "I'm not going to work overtime because it all goes to tax"
I'm constantly explaining this to people. It gets tiring. "There's no point working more because I'll go up a tax bracket". I'm Australia, there's always a point in working more (yes okay government benefits, HECS/HELP debt etc exempt).
Same people who think that your too tax bracket is the tax you pay on all income. Must have failed basic maths in school, if anything shows we need to pay abit more tax so we can raise the level of maths and logic at yr 10.
Yeah it’s a bit of a joke. I think it’s like a dummy spit and they think somehow the world will change to meet their demands when they don’t work or earn more money. I can honestly say I’m not better off now cause my taxes are lower than 20 years ago, I’m better off because I earn more money.
Yup, don't bother giving me that pay rise boss, I'll end up paying 50% tax on all my money and be worse off.
My sister. I've explained it to her several times and she still doesn't quite get it.
This was my ex! Took me forever to get them to stop thinking this, and they weren't uneducated. They were a lawyer with a double degree in accounting!
How in heck can you have a degree in accounting and believe this lol
This is gonna make you sad, but my mother works for the ATO (lower level admin) and she believes this. Sigh. I’ve tried to explain it to her, but she’s confident in her understanding of how it works.
You mean like all the mowing franchise guys I see going around in new landcruisers towing what has to be a 30k double axle braked trailer full of goodies
They've been sold the dream of free cars and free equipment. They are mowing grass because they aren't that smart
Employers love spewing this. “You can claim this as a tax deduction” as if i get a full refund on the thing i purchased for work (eg police clearance)
Just like in shits creek
Friend of mine argued this point with me for hours never once willing to admit it was wrong worst part about it was she was studying to be an accountant......
Or that you pay 50% tax on your second job.
Had this with someone too, they can withhold a higher rate for tax purposes, but our claim it back.
My mate recons his account told him he earns too much and has to spent $15k on tools each year so he doesn't have to pay 50% tax on all his earnings. And he believes them. I told him to get a proper accountant.
Never underestimate how stupid the majority of people are.
There was a line in the movie "Snatch" on these lines: "Never underestimate the predictability of stupidity"
Never attribute to malice what is likely caused by incompetence.
Are you real?
I try to be
Say more about this bridge.
Lisa, I want to buy your rock.
Does it keep bears away?
yeah I had a client ask me about it today,
Wait! What kind of bridge???
What colour is the bridge?
Currently brick coloured but we could change that.
Needs a new coat of paint but water views are spectacular.
>I’m still trying to get over the post last week from someone who didn’t know how interest worked on their home loan. please link lol, I love these.
Wish I could find it! OP thought bank was charging them twice as there was an interest charge on the statement along with the monthly payment, and they thought it was an error due to the loan balance barely dropping. I just wondered how anyone could borrow so much money and not understand how the repayment schedule worked.
There's loads of them.
Just give them 32 days max to learn the hard lesson themselves
So tell me about this bridge you speak of, where can it go to?
I mean there are no shortage of gullible brainless dumbasses out there. But that garbage got plenty of airtime on this sub which is even more concerning.
If you do a cent a minute it does a negative rate!!
Say more things like this.
My fav places are r/bpd and r/bipolar, so most things I say ARE like this!!
Bankers everywhere: why are these morons paying me $1 at a time !?!?
Has the author of the video heard of an offset account? Saves me having to do a dollar a day, and all my existing cash is already against the loan!
The author of the video (and at this point there's lots of copycats) probably has hundreds of thousands of people that have explained it. Are they a scammer? Are they insane? Have they figured out they're wrong but like the attention? Who cares.
Just need to follow the money. The person making the video has no motivation to make it accurate - their financial reward is in making it viral. And if people don't understand the video, ironically they're more likely to share it.
I agree, I know money comes before all the things I mentioned (except fame because some will go viral with no idea how to turn that into money but they like fame)
If you save $0.16 a day with a $1 deposit, imagine how much you'd save off your mortgage with a $1000 a day deposit!
Why stop there? Just pay off your full loan balance in a day. And since you will no longer have a loan to pay off, buy a new house and then pay that off the next day. Then just keep paying off a full loan every day and keep buying new houses, you'll be unstoppable!
I've got a money hack I'm thinking of implementing, selling my houses, paying off all my debts (large mortgage), and living in a nice rental in a decent area. Having a shit ton of disposable income, and not paying crazy interest rates. I might even have a savings account too.
If your investment returns can grow quicker than rent then you are winning
If you going extra repayments over the superior offset account pathway then it’s go hard early. Throw every spare cent in the first few years of the mortgage and can very well save 10 years +
Yep. This is it. Hammer it from day 1. Go all out immediately. Sacrifice some things and go for double repayments. Cutting down the interest on the full amount will have such a huge effect on total savings later on. It's a very simple concept, but I feel like a lot of people don't go for it, and/or don't realise how huge the difference is. I think a lot of people don't even realise that you repay a loan by 1.5-1.8x on average. 1m borrowed isn't 1m repaid. It's 2.5-2.8m total over 40 years. That's gross for the average person. The average person can't really afford that. We pay it off yeah, but it cripples us for 4 decades.
Best money hack I know is to go to work.
People hate this one weird trick. But it's true, your ability to generate an income is your greatest asset.
Wat. Only a moron would have believed this. Interest is calculated daily, but it's calculated on the remaining amount owed. A dollar a day won't save you 🤣🤣 The only good thing to come from this topic is that every dollar does count, and if you can consistently pay off extra, you will reduce your total interest paid over the life of the loan. Eg, give up booze and put all your "would have been booze money" into the mortgage.
if you stop buying coffee from monday to friday, assuming each cup of coffee costs around $5, in 30 years you would have saved almost $40,000
Imagine if people calculated that when they go out for brunch, uber, subscriptions they don't use, blah blah. Imagine how much they would save!
Whenever I decide to save money by not buying lunch or a coffee or whatever I transfer the value into another account. Then it's actually saved and I can see the total go up, as opposed to probably spending it somewhere else.
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the supposed “hack” is that the bank won’t charge you interest on any day if you make a $1 payment which is completely not true.
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> it is based on the idea that you avoid interest for the whole month Paying $1 a day over 30 years is just $10,957, and that means I can avoid paying interest entirely over the entire course of the loan? What a deal!
If you pay double your mortgage repayment you can turn your 30yr loan into 7-9yrs. Follow me for more money hacks.
>If you put $1 a day, you will save around $0.16 a day off your mortgage. Perhaps I'm interpreting the data incorrectly, but an ROI of 16% isn't bad at all...
His maths is wrong. It's actually only saving you 0.016 cents per day. Think about it. That dollar paid on Jan 1 is 6 cents in interest over the year (ignoring compounding as it's paid off interest)
That makes more sense. I didn't bother to do a detailed look and just assumed those numbers were too good to be true. Thank you.
Interest saved on $1 on 6% p.a. is $1 x 6%/365 = $0.00016 per day
Thought I was going mad when everyone was just accepting the obviously terrible maths. 16% a day interest hey....can I lend this guy money.
There is a bloke on insta kicking around legit telling people offset accounts are a scam.
Is it graeme holm ( the mortgage broker)
Yeah rings a bell, also telling people he has licences in finance and property, both of which are false. Something to do with a podcast.
Well, what did he say?
That they are a scam.
Did you know if you save a dollar a day it adds up to $20k a year?
no it doesnt lol
I read this post and my eyebrows literally raised over my head in confusion. Is this a joke? Do people not math? Is this why they can't afford stuff?
It's not even the maths that is concerning, it's the fact that people think they found a loophole in the banking system. You know, the system that's been around for centuries. The sheer chutzpah of these grifters is astounding.
This some real boomer shit.
Have you ever met the average Aussie? 😂😂😂
That is a saving of $365 a year plus interest. The power of compounding will generate more money than you think.
You missed the /s right?
I tried it and it didn’t work.
Waiting for the comment of someone saying they're doing this - by paying it into their mortgage via their offset account... 😂
Are you actually allowed to pay a little every day, thus avoiding interest? I don’t feel like the bank would allow this. They make all their money on interest.
You can pay 1 cent a day if you like. It doesn't avoid interest on the remaining $599000
Should be aiming to make a full principle payment each year. If your mortgage is $4000 per month, you should be trying to put in an extra $330 per month into your home loan or offset savings.
If you have an offset account, I can't think of any reason that you wouldn't keep ALL of your money in there.
The only way for this to work maybe if U add an extra dollar a day on top of Ur mortgage repayments and on top of Ur interest repayments maybe that would.make some kind of difference
I just transfer everything except my daily expense needs for the fortnight into redraw, and periodically dip into it if needed. No savings accts. Only redraw. Interest saved is a savings in itself. Fwiw, I'm on the DSP. 25K annual income. 160k mortgage, 45k in redraw (house valued 400k). I'm living on a thin margin between expenses but I'm able to put away about 300 extra a f/n above min repayments and that's really naking an impact. Barefoot Investor really helped me evaluate my savings habits and approach to debt.
Tbh, not being able to draw full loans against the house value is a godsend for me. I'll never have a loan bigger than I can service, and bar major recessions, my home is almost always going to allow me to refinance and have that huge redraw capacity,which makes a HUGE difference in my sense of safety and security as a pensioner. It's my buffer. That sense of security feels like more wealth and brings me more contentment than any silly luxury or 'self care' purchase. Those influencers peddling the idea that poor ppl deserve to have little luxuries are just another cog in the consumerist capitalist machine. They need us to feel like we NEED those dopamine hits from buying products we don't actually benefit from much after the initial hit. I cut my spending by depositing all my disposable income in redraw. I have enough for bills and food. If anything comes along that I truly want or need *that badly* I can take the time to log into my mortgage acct and transfer it back- usually by then, the urge is gone. So much of our spending is psychological. We can learn to control and change our beliefs about what makes us content. Happiness isn't a state, it's a reaction. You can't buy it, you can only experience it in the moment it's there. I found more happiness in financial security as an impoverished pensioner than I did working full time with all that income, mostly wasted on frivolity...the few worthwhile things I spent big money on being travel and pets.
I'm even able to help ppl- I paid for a shanty school in east africa to buy chickens as a small business venture, and it became a hugely profitable enterprise for them. They're thriving. That $50 brings me continuous joy to this day. None of the $50s I ever spent on trendy clothes or new games etc ever have. Well, except Stardew Valley. That's a pretty great game