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Readers response: What seems too expensive but is really worth the price?

We asked our readers what items or experience seem, too expensive but are really worth the price, and the response was overwhelming. Here's what our audience will always justify the price of. Robbie Kirkwood - Travel insurance. Elizabeth Foster - Business class on long haul flights. Jeanette Wallis - Coffee beans. Mandy O'Connor - A good pair of Levi jeans, and a good pair of boots. Pamela McDonald - I would say electricity! Seems lots complain about the cost until you lose power, then you realise how hard life would be without it. Tess Witchell - Real butter! Three ply toilet rolls, frappe iced coffee from McDonald’s, and proper bakery bread. Sue Yunker - Wine! Michael Schulze - A decent cup of coffee. Suzanne Jones - A holiday. Rose Niemack - Fruits and vegetables. Image credits: Shutterstock

Money & Banking

"Yet another disgrace": Rolf Harris’ net worth revealed

Disgraced TV star Rolf Harris died penniless after wiping out his estimated $31 million fortune, making it difficult for his victims to claim compensation. The convicted pedophile died of neck cancer and old age last year after spending his final years as a recluse with his wife at their luxury $10 million riverside mansion in Bray, Berkshire. Harris – a staple of children’s TV in the 1980s - was convicted of 12 indecent assaults, and managed to overturn only one of his convictions. The vile pedophile was released from prison in 2017. After his death, it was said that he left a $31 million fortune that he amassed during his career to his wife Alwen Hughes and daughter Bindi, 60. However, probate documents seen by The Sun show that his assets were said to be worth just $853,436.98 when he died. When expenses were taken out the net value of his estate was $0. It is believed that most of his fortune was spent to make it difficult for his victims, who were seeking compensation, to access his wealth following his death. A large part of his fortune is believed to have been used on around-the-clock carers for him and his wife Alwen, who died in September this year after suffering from dementia. His legal documents show that his will was last signed in March 2022, a year before his death, and was witnesses by two of his carers. Investigator and ex-detective Mark Williams-Thomas, who helped to convict Harris, said: “This is yet another disgrace. “He has obviously planned to get rid of money and assets and there is no way he’d have actually been penniless. “He had amassed a huge amount of wealth and I would assume he has squirrelled it away to avoid victims making claims on it, even after his death. The man had no shame.” Harris was known for a string of children's TV hits and was the face of British Paints for more than three decades before he was dumped by the brand when he was arrested in 2013. The following year, he was convicted a found guilty on 12 counts of indecent assault, and was sentenced to five years and nine months in jail. The assaults include one on an eight-year-old fan who asked for his autograph, two on girls in their early teens, and a catalogue of abuse against his daughter's friend of over 16 years. He was released on parole in May 2017 after serving three years behind bars. Image: Alan Davidson/ Shutterstock Editorial

Money & Banking

To move or not to move: is it cheaper to find a new place or stay when your rent increases by 10%?

<a href="https://theconversation.com/profiles/park-thaichon-175182">Park Thaichon</a>, <a href="https://theconversation.com/institutions/university-of-southern-queensland-1069">University of Southern Queensland</a> and <a href="https://theconversation.com/profiles/sara-quach-175976">Sara Quach</a>, <a href="https://theconversation.com/institutions/griffith-university-828">Griffith University</a> Your landlord has just raised your rent by 10% and your mind starts running the numbers – should you cop it sweet or look to move? It’s a familiar scenario in today’s unpredictable housing market. Understanding the real costs of staying versus moving is essential for making informed choices: renters must consider hidden expenses such as moving costs, deposits and changing rental rates, giving them tools to handle rising rent pressures more effectively. <h2>A grim time for many renters</h2> National median market rents have hit record highs, reaching $627 per week, with an average annual growth rate of 9.1% during the past three years, according to real estate giant <a href="https://www.aph.gov.au/About_Parliament/Parliamentary_departments/Parliamentary_Library/Budget/reviews/2024-25/Housing#:%7E:text=Based%20on%20April%202024%20CoreLogic,the%20past%203%20calendar%20years">CoreLogic</a>. <a href="https://www.corelogic.com.au/news-research/news/2024/rent-growth-picked-up-in-the-start-of-2024,-taking-rents-to-new-record-highs">CoreLogic</a> also reported annual rental changes (houses and units) in regional Australia are not far off from the big cities: annual rent changes were 9.4% for combined capital cities, 6.4% for combined regional areas, and 8.5% nationally. So, is it better to stay or move if your rent is raised by 10%? Let’s examine the costs and benefits of each option. <h2>A breakdown of typical moving costs</h2> We’ll start with the most obvious expense: moving costs. Professional moving services aren’t cheap. For example, moving a three-bedroom house in the Gold Coast costs <a href="https://www.muval.com.au/removalists/gold-coast">$1,095.25 on average</a>, with an hourly rate of $158.26. In a bigger city like Melbourne, the cost is slightly higher at <a href="https://www.muval.com.au/removalists/melbourne">about $1,118.46</a>. The moving costs between states or cities will be more expensive if you move further away. You could choose to handle packing yourself and hire some help with a truck – a common option with businesses such as “<a href="https://www.gumtree.com.au/s-removals-storage/gold-coast/2+men+and+a+truck/k0c18643l3006035">Two Men and a Truck</a>”, which typically costs around $100 per hour. Be aware, though, that the hourly rate often starts from the moment the truck leaves the company’s warehouse until it returns. Alternatively, you can rent a van for a lower price, such as $87 for a 24-hour <a href="https://www.bunnings.com.au/for-hire-handivan-24hr-first-100kms-inc-_p5470402">Handivan rental at Bunnings</a>. Don’t forget the cost of moving boxes, too: Bunnings’ 52 litre <a href="https://www.bunnings.com.au/bunnings-52l-light-duty-moving-carton_p0517130?srsltid=AfmBOoqCYAWT0P5apPiJpoOLRAIpUCHNi63ztvIZrG5CxCoNOv45G0TV">moving cartons</a> cost $2.66 each. End-of-lease or <a href="https://firstcallhomeservices.com.au/service-menu/bond-exit-end-lease-cleaning/">bond cleaning</a> is another common expense. For a typical three-bedroom property, internal cleaning can range from $365 to $500. If you have pets, or kids who love drawing on the walls, your cleaning costs might be a bit higher. Now, let’s look at utility connection expenses that can catch people by surprise. Cancelling your internet service can be costly if you don’t meet the exit or cancellation policies. With <a href="https://www.telstra.com.au/internet/5g-home-internet">Telstra Home Internet</a>, for example, if you cancel within the first 24 months, you must return your modem within 21 days to avoid a $400 non-return fee. Most providers charge a cancellation fee or require final device repayments, typically ranging from $100 to $500, depending on the remaining contract period. As a renter, it might be wise to choose a no-lock-in contract plan to avoid these fees if you need flexibility. Electricity and gas connection and disconnection fees are usually minor but can add up, often costing about $40 to $60 for <a href="https://www.energyon.com.au/fees-and-charges/">connection and disconnection fees</a> for electricity alone. If your house uses gas for hot water or cooking, you may have to pay additional fees for setting up service. However, there are also non-financial costs, like the time spent searching for a new home, attending inspections, and putting in applications. Moving takes effort and energy for packing, transporting and unpacking. Some people feel emotionally attached to their current home, which can make leaving harder. Older renters <a href="https://www.sciencedirect.com/science/article/abs/pii/S1353829218311304">seem to draw strength</a> from their familiarity with, attachment to, and enjoyment of their place and community. This is something to be considered. Plus, moving can take <a href="https://www.nature.com/articles/s41537-023-00349-w">an emotional toll</a>. <h2>The benefits of not moving</h2> The clear benefit of staying is avoiding the hassle of relocating. Staying means saving on moving expenses and avoiding the time spent searching for a new place, packing and unpacking. This may also save some people from needing to take time off work. Changing and updating an address is also another tedious task that can be avoided by staying. Moving can hit the hip pocket with “after moving costs” that people may not initially consider. For instance, a new location might mean a longer commute. If each trip adds just 15 extra minutes, that could amount to an additional 11 hours per month over 22 workdays. For drivers, increased fuel and parking expenses might also come into play. Is the current or new location closer to a supermarket, hospital, and school? This proximity could be beneficial or detrimental, depending on the surrounding environment and available services. <h2>To move or not to move?</h2> One point to note is that overall, moving costs are likely to be similar between big cities and regional areas if you get moving supplies or rent a van from a large company such as Bunnings. In the end, moving costs will be around $2,000 based on the figures above, and it can be around $800 to $1,000 cheaper if you opt to rent a van instead of using a full-service moving company. Therefore, if the current rent is $600 per week and is about to increase by 10% to $660, the additional cost would be $3,120 per year. So is it cheaper to move or stay when your rent increases by 10%? The answer is moving may save about $1,000 to $2,000, but comes with the hassle and emotional toll of relocation. Staying will be more expensive, but with less hassle and emotional strain. The right choice depends on your situation.<img style="border: none !important; box-shadow: none !important; margin: 0 !important; max-height: 1px !important; max-width: 1px !important; min-height: 1px !important; min-width: 1px !important; opacity: 0 !important; outline: none !important; padding: 0 !important;" src="https://counter.theconversation.com/content/243155/count.gif?distributor=republish-lightbox-basic" alt="The Conversation" width="1" height="1" /> <a href="https://theconversation.com/profiles/park-thaichon-175182">Park Thaichon</a>, Associate Professor of Marketing, <a href="https://theconversation.com/institutions/university-of-southern-queensland-1069">University of Southern Queensland</a> and <a href="https://theconversation.com/profiles/sara-quach-175976">Sara Quach</a>, Senior Lecturer in Marketing, <a href="https://theconversation.com/institutions/griffith-university-828">Griffith University</a> Image credits: Shutterstock This article is republished from <a href="https://theconversation.com">The Conversation</a> under a Creative Commons license. Read the <a href="https://theconversation.com/to-move-or-not-to-move-is-it-cheaper-to-find-a-new-place-or-stay-when-your-rent-increases-by-10-243155">original article</a>.

Money & Banking

Having the ‘right’ friends may hold the secret to building wealth, according to new study on socioeconomic ties

<a href="https://theconversation.com/profiles/brad-cannon-2216202">Brad Cannon</a>, <a href="https://theconversation.com/institutions/binghamton-university-state-university-of-new-york-2252">Binghamton University, State University of New York</a> Having wealthy people in your social network significantly boosts the likelihood that you’ll participate in stock markets and savings plans, according to a new working paper I co-authored. My colleagues and I <a href="https://www.nber.org/system/files/working_papers/w32186/w32186.pdf">recently conducted research</a> on social finance to understand the ways in which social networks affect stock market participation and savings behavior. This is important because a substantial fraction of households in the U.S., particularly <a href="https://www.axios.com/2023/10/18/percentage-americans-own-stock-market-investing">lower-income families, do not own stocks</a>. Given that the total return to the U.S. stock market from 1980 through September 2024 has been over 12,000% – for example, US$1,000 <a href="https://ofdollarsanddata.com/sp500-calculator/">invested in the S&P 500</a> in 1980 would be worth $121,350 today – this creates a disparity in wealth for those who participate relative to those who do not. Understanding why some people invest and others don’t is important for addressing social concerns such as rising inequality. In our study, we looked at <a href="https://academic.oup.com/ej/advance-article/doi/10.1093/ej/ueae074/7720537">social capital</a>, which is a measure of the value that comes from being in a group or having dense social networks. Researchers have found that social capital can have positive impacts on individuals and communities, spurring innovation, <a href="https://www.nature.com/articles/s41586-022-04996-4">economic prosperity</a> and better health outcomes. We used friendship data from Facebook to measure different aspects of social networks by county in the U.S. We combined this data with tax information from the Internal Revenue Service about investments and savings. We found that in counties where friendships with prosperous individuals are more common, investment and savings tend to be higher. Moreover, we found that having these friendships with wealthy individuals plays a more important role in shaping financial behaviors than two other aspects of social capital we looked at in our study: having a tight group of friends and living in a community with strong civic engagement. Of course, making wealthy friends alone does not guarantee you’ll invest or save more. But perhaps knowing people who invest makes it less daunting and fraught, particularly if those friends can serve as a resource and sounding board. “Friends with Benefits: Social Capital and Household Financial Behavior” was co-authored by <a href="https://www.marshall.usc.edu/personnel/david-hirshleifer">David Hirshleifer</a> and <a href="https://hankamer.baylor.edu/person/joshua-thornton">Joshua Thornton</a>.<img style="border: none !important; box-shadow: none !important; margin: 0 !important; max-height: 1px !important; max-width: 1px !important; min-height: 1px !important; min-width: 1px !important; opacity: 0 !important; outline: none !important; padding: 0 !important;" src="https://counter.theconversation.com/content/239370/count.gif?distributor=republish-lightbox-basic" alt="The Conversation" width="1" height="1" /> <a href="https://theconversation.com/profiles/brad-cannon-2216202">Brad Cannon</a>, Assistant Professor of Finance, <a href="https://theconversation.com/institutions/binghamton-university-state-university-of-new-york-2252">Binghamton University, State University of New York</a> Image credits: Shutterstock This article is republished from <a href="https://theconversation.com">The Conversation</a> under a Creative Commons license. Read the <a href="https://theconversation.com/having-the-right-friends-may-hold-the-secret-to-building-wealth-according-to-new-study-on-socioeconomic-ties-239370">original article</a>.

Money & Banking

Borrowing money isn’t always a bad thing – debt can be a sensible way to build wealth

<a href="https://theconversation.com/profiles/bomikazi-zeka-680577">Bomikazi Zeka</a>, <a href="https://theconversation.com/institutions/university-of-canberra-865">University of Canberra</a> Debt, in some form or another, is part of our financial profiles whether we like it or not. And it can be a useful way to build wealth if it is managed carefully and wisely. For example, you may borrow money from the bank to buy an asset – a resource of economic value that generates income from its productive use. Investment property is an example. So investing in an income-producing property can be a good idea. If you are already in the property market, the home equity you’ve accumulated – the share of the property value that’s yours – can help you buy a second property. This time, you may not need a deposit as big as the initial investment. In the event that the rental market is booming and your tenants pay you more than what you repay on the loan, municipal rates and property manager fees, then the wealth-building machine will start to run itself. But debt makes many people uncomfortable. In South Africa, a person earning R20,000 a month commits on average <a href="https://businesstech.co.za/news/finance/585372/south-africas-middle-class-is-in-serious-trouble-right-now/">63% of their salary to repaying unsecured debt</a> – such as credit cards, personal loans, overdrafts or “buy now, pay later” facilities. As a general guideline, it’s suggested that <a href="https://www.investopedia.com/terms/d/dti.asp">no more than 40%</a> of your income should be used to service debt. Financial anxiety has its roots in some misconceptions. The main one is that all debt is bad. This isn’t true. Prudent borrowing to buy an asset can help build wealth in the medium to long term. So fears about debt need to be weighed against a broader understanding of wealth accumulation. Well-managed debt can play a role in that process. Here are the four biggest misconceptions about debt. Recognising them will help you develop a more nuanced approach to debt. <h2>The misconceptions</h2> All debt is bad debt. Indeed, debt is a problem when you can no longer manage it and it starts to manage you. One of the simplest ways to tell whether debt is working for you or against you is through “leveraging”. This refers to the use of debt to acquire an asset that is worth more than the value of the debt. It’s also known as positive or favourable leveraging. People who take out unsecured loans are leveraging unfavourably when the debt is driven by consumption. Often there’s nothing to show for what you’ve spent. Unsecured loans also tend to charge higher interest rates to compensate for the lack of collateral. Only financially reckless people are in debt. This is the next misconception. Second to unsecured loans, most South African consumer debt portfolios are taken up by <a href="https://businesstech.co.za/news/wealth/617685/these-income-levels-in-south-africa-owe-the-most-debt/">home loans</a>. The most realistic way to gain entry into the housing market is through a mortgage. You’re doing the right thing if your mortgage is paid off within a reasonable time. This will mean that, in the long term, the value of the property will surpass the home loan amount that was taken out to buy the property in the first place. But there are two misconceptions related specifically to mortgages. After you’ve paid the mortgage deposit, you won’t have other fees to pay. This isn’t correct. Banks charge a fee to open and close a home loan account. There can also be a penalty when a home loan is repaid prematurely. So be sure to read the fine print about discharge fees or closing costs. If you stick to the repayment amount for your mortgage, you’ll be able to repay the loan quickly. This isn’t true – even if interest rates fall and your mortgage repayments decline, your home loan is most likely tied to a loan term of 20 to 30 years. Many banks will quote a monthly mortgage repayment amount that seems affordable at face value but is in fact based on a 20-year term period. Banks are businesses and it works in their favour if you take longer to repay your mortgage because that translates into more interest repayments. The longer the duration of the home loan, the more interest you pay, the more profit they make. If it takes over 20 years to repay a bond, it’s often the case that the value of the interest repayments exceeds the initial loan amount. Home loan calculators are a useful tool that can help you assess how much you could afford to repay on a home loan depending on the deposit saved, if interest rates change and how long it will take you to repay the mortgage with topped-up contributions. It is essential to have a goal for when you’d like to finish paying off your mortgage and a plan in place to achieve this goal. If you don’t do this you could become a mortgage prisoner. <h2>Keeping your eye on the prize</h2> As we’re about to conclude the year and enter the festive season, it’s a good time to remember your financial goals and not let your guard down by unconsciously swiping or tapping that credit card. “Janu-worry” is around the corner, and so is the financial anxiety that comes with it. But it need not be the case. Debt can either be the cure or the cause of your financial position. Reconsider spending patterns that prompt you to use your credit card. Too much debt over short periods is an irregular spending pattern that is a warning sign. There’s no harm in buying what you can afford or staying in your financial lane if the alternative forces you to sacrifice your hard-earned income on servicing consumption-driven debt. For better or worse, debt is a part of our financial portfolios. But the road to financial empowerment is not always easy – financial planning can help you keep your eye on the prize.<img style="border: none !important; box-shadow: none !important; margin: 0 !important; max-height: 1px !important; max-width: 1px !important; min-height: 1px !important; min-width: 1px !important; opacity: 0 !important; outline: none !important; padding: 0 !important;" src="https://counter.theconversation.com/content/192630/count.gif?distributor=republish-lightbox-basic" alt="The Conversation" width="1" height="1" /> <a href="https://theconversation.com/profiles/bomikazi-zeka-680577">Bomikazi Zeka</a>, Assistant Professor in Finance and Financial Planning, <a href="https://theconversation.com/institutions/university-of-canberra-865">University of Canberra</a> Image credits: Shutterstock This article is republished from <a href="https://theconversation.com">The Conversation</a> under a Creative Commons license. Read the <a href="https://theconversation.com/borrowing-money-isnt-always-a-bad-thing-debt-can-be-a-sensible-way-to-build-wealth-192630">original article</a>.

Money & Banking

The financial reality check after a major diagnosis

Once you have received and processed your doctor’s diagnosis, take stock of the situation, because this will determine how you respond and what resources you have available to support you going forward. Who received the diagnosis – you or your spouse (if you have one)? Is it a terminal illness, chronic condition or treatable setback? If you are not yet retired, will you be able to keep working, need a period off work or will this bring forward your retirement? If leaving work temporarily, what are your prospects for re-entering the workforce? Will your partner need to leave their work to care for you (or vice versa)? Once you have clarified and considered this, spring into action as soon as possible. Revisit your spending Healthcare is expensive by any measure. Pensioners and healthcare card holders may get much or all of your treatment covered, but waiting times in the public system can be lengthy. For self-funded retirees, even with private health insurance, there can be considerable out-of-pocket costs: specialist visits, diagnostics, symptom management, physiotherapy and so on. Depending on the type of diagnosis, you may also need to modify your home (install ramps, railings etc.) and/or obtain specialist furniture and equipment. Then comes care requirements – private nurses, retirement living, hospice or palliative care. Your lifestyle may also change, and quickly. Your clothes and shoes may no longer fit if you lose weight rapidly. You may no longer be able to drive. You may need help with household chores – cleaning, cooking, gardening. Covering these requires money if you don’t have family and friends able to lend a helping hand. Carefully look at what supports your new reality demands and whether they will be one-off or ongoing expenses. Some things will need to be purchased, others could be hired to split the cost over the longer term. Secure your income Once you’ve established the impact on your ability to work and your spending needs, determine how you will pay for everything going forward. Your emergency fund can provide short-term cash if you need to stop working suddenly or fork out for large, unexpected bills. Depending on your age and circumstances, it may be worth bringing forward your retirement – allowing you to draw income from superannuation and focus more on your (or your partner’s) health. Check your insurances to see what claims you could make – having paid the premiums, now is the time make use of them. Relevant insurances include total permanent disability, income protection, trauma or critical illness cover. Meanwhile some life insurance policies may pay out based on a specialist’s diagnosis, unlocking much-needed funds sooner. Depending on your diagnosis, policy and the type of insurance, payouts may be a lump sum or smaller payments spaced out over time. Update your estate plans A major diagnosis typically elicits thoughts about mortality, legacy and how you want your loved ones to be provided for. Crucially, it may also influence factors such as guardianship of minors and pets while you are unwell/in hospital, Power of Attorney to cover important legal and financial decisions if you are incapacitated, and palliative care arrangements if required. Before heavy medications, surgeries or further deterioration of your health cloud your judgement, ensure your will and estate plans are updated to fully reflect your current needs and wishes. Look after yourself Stress, shock, anger and despair are common emotions to feel when faced with a major diagnosis. As such, it’s important you look after your mental and emotional wellbeing too. It needn’t cost a cent – you could look to free counselling services available such as Lifeline and Beyond Blue; a daily walk by the beach or through the local park; catching up with loved ones for support and companionship. Keeping your spirits up, as much as you can under the circumstances, can improve your quality of life while also helping you make clearer decisions about your health, finances and relationships – making it arguably the best investment of all. Back that up with sound legal, tax and financial advice. There is much to consider where insurance, superannuation, inheritances, Centrelink and more are involved, and you can’t know everything – especially when your focus is rightly elsewhere! Helen Baker is a licensed Australian financial adviser and author of On Your Own Two Feet: The Essential Guide to Financial Independence for all Women. Helen is among the 1% of financial planners who hold a master’s degree in the field. Proceeds from book sales are donated to charities supporting disadvantaged women and children. Find out more at <a href="http://www.onyourowntwofeet.com.au/">www.onyourowntwofeet.com.au</a> Disclaimer: The information in this article is of a general nature only and does not constitute personal financial or product advice. Any opinions or views expressed are those of the authors and do not represent those of people, institutions or organisations the owner may be associated with in a professional or personal capacity unless explicitly stated. Helen Baker is an authorised representative of BPW Partners Pty Ltd AFSL 548754. Image credits: Shutterstock

Money & Banking

Readers response: What exercises or activities do you enjoy that help you stay mobile?

It's no secret that we start to physically show down as we age, but keeping active and mobile can keep us going. We asked our readers what exercised they do to keep mobile in retirement years, and the response was overwhelming. Here's what they said. Karen Ambrose - I’ve been a dance teacher since 1982 and am still teaching. Dancing is my happy place! Rosemary Andrews - Dragon Boat Paddling. I started when I was 59. Still going 14 years on. Love it!! Anne Gray - Pilates, Yoga, Zumba. Sue Ryan - Boxing, HIIT, Body Attack, Pilates, Aqua, Pump and running. I’m 72. Wendy Oliver - Chair based exercises. Anne Moulynox - Pickleball at least twice a week. I took up ballet at 70 but gave it up as it was far too sedate, so took up Pickleball at 73. Sally O'Neill - Volunteering makes me get up and meet other people. Robyn Harrison - Swim a kilometre twice a week and two long walks on the beach each week. Suzanne Bluett - Nothing better than walking. Lorraine Clarbull - Tai Chi. Image credits: Shutterstock

Body

Are older adults more vulnerable to scams? What psychologists have learned about who’s most susceptible, and when

<a href="https://theconversation.com/profiles/natalie-c-ebner-1527554">Natalie C. Ebner</a>, <a href="https://theconversation.com/institutions/university-of-florida-1392">University of Florida</a> and <a href="https://theconversation.com/profiles/didem-pehlivanoglu-1527551">Didem Pehlivanoglu</a>, <a href="https://theconversation.com/institutions/university-of-florida-1392">University of Florida</a> About 1 in 6 Americans <a href="https://www.census.gov/library/stories/2023/05/2020-census-united-states-older-population-grew.html">are age 65 or older</a>, and that percentage <a href="https://www.ncoa.org/article/get-the-facts-on-older-americans">is projected to grow</a>. Older adults often hold positions of power, have retirement savings accumulated over the course of their lifetimes, and make important financial and health-related decisions – all of which makes them attractive targets for financial exploitation. In 2021, there were more than 90,000 older victims of fraud, according to the FBI. These cases resulted in <a href="https://www.ic3.gov/Media/PDF/AnnualReport/2021_IC3ElderFraudReport.pdf">US$1.7 billion in losses</a>, a 74% increase compared with 2020. Even so, that may be a significant undercount, since embarrassment or lack of awareness <a href="https://assets.aarp.org/rgcenter/econ/fraud-victims-11.pdf">keeps some victims from reporting</a>. <a href="https://ncea.acl.gov/elder-abuse#gsc.tab=0">Financial exploitation</a> represents one of the most common forms of elder abuse. Perpetrators are often individuals in the victims’ inner social circles – family members, caregivers or friends – but can also be strangers. When older adults experience financial fraud, they typically <a href="https://public.tableau.com/app/profile/federal.trade.commission/viz/AgeandFraud/Infographic">lose more money</a> than younger victims. Those losses can have <a href="https://doi.org/10.1057/sj.2012.11">devastating consequences</a>, especially since older adults have limited time to recoup – dramatically reducing their independence, health and well-being. But older adults have been largely neglected in research on this burgeoning type of crime. We are <a href="https://ebnerlab.psych.ufl.edu/natalie-c-ebner-phd/">psychologists who study social cognition</a> and <a href="https://ebnerlab.psych.ufl.edu/didem-pehlivanoglu/">decision-making</a>, and <a href="https://ebnerlab.psych.ufl.edu/">our research lab</a> at the University of Florida is aimed at understanding the factors that shape vulnerability to deception in adulthood and aging. <h2>Defining vulnerability</h2> Financial exploitation involves a variety of exploitative tactics, such as coercion, manipulation, undue influence and, frequently, some sort of deception. The majority of current research focuses on <a href="https://doi.org/10.1002/acp.3052">people’s ability to distinguish between truth and lies</a> during interpersonal communication. However, deception occurs in many contexts – increasingly, over the internet. Our lab conducts laboratory experiments and real-world studies to measure susceptibility under various conditions: investment games, lie/truth scenarios, phishing emails, text messages, fake news and deepfakes – fabricated videos or images that are created by artificial intelligence technology. To study how people respond to deception, we use measures like surveys, brain imaging, behavior, eye movement and heart rate. We also collect health-related biomarkers, such as being a carrier of <a href="https://pubmed.ncbi.nlm.nih.gov/8346443/">gene variants</a> that increase risk for Alzheimer’s disease, to identify individuals with particular vulnerability. And <a href="https://doi.org/10.20900/agmr20230007">our work</a> shows that an older adult’s ability to detect deception is not just about their individual characteristics. It also depends on how they are being targeted. <figure class="align-center zoomable"><a href="https://images.theconversation.com/files/593784/original/file-20240513-16-j9zy1i.png?ixlib=rb-4.1.0&q=45&auto=format&w=1000&fit=clip"><img src="https://images.theconversation.com/files/593784/original/file-20240513-16-j9zy1i.png?ixlib=rb-4.1.0&q=45&auto=format&w=754&fit=clip" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px" srcset="https://images.theconversation.com/files/593784/original/file-20240513-16-j9zy1i.png?ixlib=rb-4.1.0&q=45&auto=format&w=600&h=339&fit=crop&dpr=1 600w, https://images.theconversation.com/files/593784/original/file-20240513-16-j9zy1i.png?ixlib=rb-4.1.0&q=30&auto=format&w=600&h=339&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/593784/original/file-20240513-16-j9zy1i.png?ixlib=rb-4.1.0&q=15&auto=format&w=600&h=339&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/593784/original/file-20240513-16-j9zy1i.png?ixlib=rb-4.1.0&q=45&auto=format&w=754&h=426&fit=crop&dpr=1 754w, https://images.theconversation.com/files/593784/original/file-20240513-16-j9zy1i.png?ixlib=rb-4.1.0&q=30&auto=format&w=754&h=426&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/593784/original/file-20240513-16-j9zy1i.png?ixlib=rb-4.1.0&q=15&auto=format&w=754&h=426&fit=crop&dpr=3 2262w" alt="A figure with two circles and an arrow between them. One circle shows icons that symbolize individual susceptibility to deception -- like a brain, and a walking cane -- while the other has icons of types of deception, like mail or a text message." /></a><figcaption>Vulnerability depends not only on the person, but also the type of fraud being used. Natalie Ebner and Didem Pehlivanoglu</figcaption></figure> <h2>Individual risk factors</h2> Better cognition, social and emotional capacities, and brain health are all associated with less susceptibility to deception. Cognitive functions, such as how quickly our brain processes information and how well we remember it, <a href="https://doi.org/10.1177/1745691619827511">decline with age</a> and impact decision-making. For example, among people around 70 years of age or older, declines in analytical thinking are associated with <a href="https://doi.org/10.1037/xap0000426">reduced ability to detect false news stories</a>. Additionally, low memory function in aging is associated with <a href="https://doi.org/10.1093/geronb/gby036">greater susceptibility to email phishing</a>. Further, according to recent <a href="https://osf.io/preprints/osf/6f2y9">research</a>, this correlation is specifically pronounced among older adults who carry a gene variant that is a genetic risk factor for developing Alzheimer’s disease later in life. Indeed, some research suggests that greater financial exploitability may serve as <a href="https://doi.org/10.1016/j.neubiorev.2022.104773">an early marker</a> of disease-related cognitive decline. Social and emotional influences are also crucial. Negative mood can enhance somebody’s ability to detect lies, while <a href="https://doi.org/10.1037/xap0000426">positive mood in very old</a> age can impair a person’s ability to detect fake news. Lack of support and loneliness exacerbate susceptibility to deception. Social isolation during the COVID-19 pandemic has led to <a href="https://doi.org/10.1093/gerona/glaa077">increased reliance on online platforms</a>, and older adults with lower digital literacy are <a href="https://doi.org/10.1093/geront/gnac188">more vulnerable to fraudulent emails and robocalls</a>. Finally, an individual’s brain and body responses play a critical role in susceptibility to deception. One important factor is <a href="https://doi.org/10.1016/j.tins.2020.10.007">interoceptive awareness</a>: the ability to accurately read our own body’s signals, like a “gut feeling.” This awareness is correlated with <a href="https://doi.org/10.1093/geroni/igad104.3714">better lie detection</a> in older adults. According to <a href="https://doi.org/10.1093/gerona/glx051">a first study</a>, financially exploited older adults had a significantly smaller size of insula – a brain region key to integrating bodily signals with environmental cues – than older adults who had been exposed to the same threat but avoided it. Reduced insula activity is also related to greater difficulty <a href="https://doi.org/10.1073/pnas.1218518109">picking up on cues</a> that make someone appear less trustworthy. <h2>Types of effective fraud</h2> Not all deception is equally effective on everyone. <a href="https://doi.org/10.1145/3336141">Our findings</a> show that email phishing that relies on reciprocation – people’s tendency to repay what another person has provided them – was more effective on older adults. Younger adults, on the other hand, were more likely to fall for phishing emails that employed scarcity: people’s tendency to perceive an opportunity as more valuable if they are told its availability is limited. For example, an email might alert you that a coin collection from the 1950s has become available for a special reduced price if purchased within the next 24 hours. There is also evidence that as we age, we have greater difficulty detecting the “wolf in sheep’s clothing”: someone who appears trustworthy, but is not acting in a trustworthy way. In <a href="https://doi.org/10.1038/s41598-023-50500-x">a card-based gambling game</a>, we found that compared with their younger counterparts, older adults are more likely to select decks presented with trustworthy-looking faces, even though those decks consistently resulted in negative payouts. Even after learning about untrustworthy behavior, older adults showed greater difficulty overcoming their initial impressions. <h2>Reducing vulnerability</h2> Identifying who is especially at risk for financial exploitation in aging is crucial for preventing victimization. We believe interventions should be tailored, instead of a one-size-fits-all approach. For example, perhaps machine learning algorithms could someday determine the most dangerous types of deceptive messages that certain groups encounter – such as in text messages, emails or social media platforms – and provide on-the-spot warnings. Black and Hispanic consumers are <a href="https://www.ftc.gov/system/files/documents/reports/combating-fraud-african-american-latino-communities-ftcs-comprehensive-strategic-plan-federal-trade/160615fraudreport.pdf">more likely to be victimized</a>, so there is also a dire need for interventions that resonate with their communities. Prevention efforts would benefit from taking a holistic approach to help older adults reduce their vulnerability to scams. Training in <a href="https://doi.org/10.1007/s40520-019-01259-7">financial, health</a> and <a href="https://www.nature.com/articles/s41598-022-08437-0.pdf">digital literacy</a> are important, but so are programs to <a href="https://doi.org/10.1186/s12889-021-10363-1">address loneliness</a>. People of all ages need to keep these lessons in mind when interacting with online content or strangers – but not only then. Unfortunately, financial exploitation often comes from individuals close to the victim.<img style="border: none !important; box-shadow: none !important; margin: 0 !important; max-height: 1px !important; max-width: 1px !important; min-height: 1px !important; min-width: 1px !important; opacity: 0 !important; outline: none !important; padding: 0 !important;" src="https://counter.theconversation.com/content/227991/count.gif?distributor=republish-lightbox-basic" alt="The Conversation" width="1" height="1" /> <a href="https://theconversation.com/profiles/natalie-c-ebner-1527554">Natalie C. Ebner</a>, Professor of Psychology, <a href="https://theconversation.com/institutions/university-of-florida-1392">University of Florida</a> and <a href="https://theconversation.com/profiles/didem-pehlivanoglu-1527551">Didem Pehlivanoglu</a>, Postdoctoral Researcher, Psychology, <a href="https://theconversation.com/institutions/university-of-florida-1392">University of Florida</a> Image credits: Shutterstock This article is republished from <a href="https://theconversation.com">The Conversation</a> under a Creative Commons license. Read the <a href="https://theconversation.com/are-older-adults-more-vulnerable-to-scams-what-psychologists-have-learned-about-whos-most-susceptible-and-when-227991">original article</a>.

Money & Banking

What is bankruptcy?

<a href="https://theconversation.com/profiles/jason-harris-147254">Jason Harris</a>, <a href="https://theconversation.com/institutions/university-of-sydney-841">University of Sydney</a> <blockquote> "Capitalism without insolvency is like Christianity without Hell." </blockquote> Those were the <a href="https://time.com/archive/6882727/the-growing-bankruptcy-brigade/">words</a> of former Apollo 8 commander Frank Borman, speaking as chairman of Eastern Airlines in the United States in the early 1980s. That company later <a href="https://www.airwaysmag.com/legacy-posts/eastern-files-for-chapter-11-bankruptcy">entered</a> Chapter 11 bankruptcy itself, in an attempt to deal with a staggering amount of debt. We all know what it means to run out of money, but what exactly is bankruptcy? It’s certainly been in the news a lot. Tupperware <a href="https://theconversation.com/tupperware-has-filed-for-bankruptcy-is-multi-level-marketing-in-trouble-239387">filed</a> for it last month. Two Australian airlines have <a href="https://theconversation.com/what-is-slot-hoarding-and-is-it-locking-out-regional-airlines-like-rex-235960">become insolvent</a> this year, and other Australian businesses have been going under at <a href="https://www.abc.net.au/news/2024-04-17/business-insolvencies-hit-record-highs-creditorwatch/103732960">record rates</a>. So how do companies go bankrupt – and what is bankruptcy protection under the law? What’s the famous Chapter 11? And is bankruptcy the end of the road? <h2>What exactly is bankruptcy?</h2> Sometimes, a person or company can’t pay all of their debts as they arise. In legal terms, we call this being “insolvent”. Receiving a large bill (such as a large tax bill) that you can’t pay on the day doesn’t necessarily make you insolvent. The law allows for a reasonable time to pay bills after receiving an invoice. But if large numbers of bills remain unpaid weeks or months after their due dates, it begins to suggest a person or business isn’t paying them because they actually can’t. Being unable to pay all of your debts makes you an insolvent debtor. Bankruptcy is the legal process that allows insolvent debtors to fairly resolve these debts. In Australia, insolvent individuals can file a bankruptcy petition with the <a href="https://www.afsa.gov.au/about-us/who-we-are">Official Receiver</a> in bankruptcy, a statutory office that is part of the Australian Financial Security Authority. A creditor who is owed at least $10,000 can also force another person into bankruptcy, by suing them in court and obtaining an order to make them bankrupt. For companies that can’t pay their debts, there are several options, including liquidation, voluntary administration and restructuring. More on these later. <h2>We let an expert take control</h2> When a person or company goes bankrupt, an independent external expert (or team of experts) is appointed to manage their assets and debt. For individuals, we call this person a registered bankruptcy trustee. In the case of corporate bankruptcies, we call them a registered liquidator. In both cases, the expert will take control of the debtor’s assets and affairs. They’ll be looking closely at why the debtor needed to declare bankruptcy in the first place, and whether anything can be sold to generate cash so at least some of the debt can be repaid. When a person goes bankrupt, not everything is up for grabs. The law allows them to <a href="https://www.afsa.gov.au/professionals/resource-hub/indexed-amounts#protected-property">retain</a> some basic essentials, such as clothes, furniture, tools of their trade, and a car valued at less than $9,400. Some categories of assets can also be exempt, such as superannuation and compensation for personal injuries. There are no similar extensions for corporate insolvency. All of a company’s assets are on the table. However, both types of debtor typically enter bankruptcy with few or no assets. In more than 80% of <a href="https://www.afsa.gov.au/sites/default/files/2023-12/ror_bankruptcies.xlsx">individual</a> and <a href="https://asic.gov.au/regulatory-resources/find-a-document/statistics/insolvency-statistics/insolvency-statistics-series-3-external-administrator-reports/#3.3">corporate</a> bankruptcy cases, there are no payments to the creditors they owe. <h2>Why seek bankruptcy protection?</h2> One key feature of formally filing for bankruptcy is that it imposes a “stay” on enforcement action against the debtor. This is a court order that gives the party owing money time to organise its affairs in an orderly way – such as by selling assets to raise cash. In corporate insolvency, there are formal procedures under Australia’s Corporations Act that aim to give a company the opportunity to negotiate a deal with its creditors. That might include formulating a plan to restructure, allowing it to exit insolvency and keep trading. But it could also include selling the business to a new owner so it can continue. Some large Australian companies, including <a href="https://newsroom.virginaustralia.com/release/virgin-australia-enters-voluntary-administration">Virgin Australia</a> and <a href="https://www.smh.com.au/business/companies/network-ten-heads-into-voluntary-administration-20170614-gwqo47.html">Channel Ten</a>, have previously used “voluntary administration” to save their businesses. Voluntary administration can give a company a chance to reduce its debts through a statutory compromise with creditors called a “deed of company arrangement”. This involves the majority of a company’s creditors approving a deal – usually, to compromise on some of their debt in exchange for a promise of future payments. The funds to make these payments might come from selling assets, or be a percentage of promised future profits. If successful, this can allow a company to keep operating and minimise job losses that would otherwise occur if it were simply shut down and its assets sold off – known as being “liquidated”. Once liquidated, a company will be deregistered by the Australian Securities and Investments Commission – that is, it will cease to exist as a separate company. <h2>What is Chapter 11 bankruptcy?</h2> You’ll often hear or read about companies filing for “Chapter 11” bankruptcy. This is because in the US, there is one law – the Bankruptcy Code 1978 – that covers both individuals and companies. Just like we’ve discussed in the Australian context, Chapter 11 of that law is specifically aimed at giving debtor companies a chance to enter into a deal with their creditors – to reduce their debts, sell some or all of the assets and hopefully allow at least part of the business to continue operating. This is what Tupperware did last month, following years of financial pressure. Where the law differs between Australia and the US is in the fact that Chapter 11 allows the debtor company’s management to remain in charge of the bankruptcy process. We call this “debtor-in-possession”. In Australia, in contrast, the liquidator – which acts as the administrator in a voluntary administration – remains in control of the company. Filing for bankruptcy can signal the end of a company’s operations, but not always. It may be possible for an external administrator to try to save the business or sell some or all of it to a new owner, paying down debt and preserving jobs. <hr /> This article is part of The Conversation’s “<a href="https://theconversation.com/au/topics/business-basics-157462">Business Basics</a>” series where we ask experts to discuss key concepts in business, economics and finance.<img style="border: none !important; box-shadow: none !important; margin: 0 !important; max-height: 1px !important; max-width: 1px !important; min-height: 1px !important; min-width: 1px !important; opacity: 0 !important; outline: none !important; padding: 0 !important;" src="https://counter.theconversation.com/content/239393/count.gif?distributor=republish-lightbox-basic" alt="The Conversation" width="1" height="1" /> <a href="https://theconversation.com/profiles/jason-harris-147254">Jason Harris</a>, Professor of Corporate Law, <a href="https://theconversation.com/institutions/university-of-sydney-841">University of Sydney</a> Image credits: Shutterstock This article is republished from <a href="https://theconversation.com">The Conversation</a> under a Creative Commons license. Read the <a href="https://theconversation.com/what-is-bankruptcy-239393">original article</a>.

Money & Banking

We tend to underestimate our future expenses – here’s one way to prevent that

<div class="theconversation-article-body"><a href="https://theconversation.com/profiles/ray-charles-chuck-howard-1361224">Ray Charles "Chuck" Howard</a>, <a href="https://theconversation.com/institutions/texas-aandm-university-1672">Texas A&M University</a>; <a href="https://theconversation.com/profiles/abigail-sussman-227057">Abigail Sussman</a>, <a href="https://theconversation.com/institutions/university-of-chicago-952">University of Chicago</a>; <a href="https://theconversation.com/profiles/david-j-hardisty-753777">David J. Hardisty</a>, <a href="https://theconversation.com/institutions/university-of-british-columbia-946">University of British Columbia</a>, and <a href="https://theconversation.com/profiles/marcel-lukas-1236384">Marcel Lukas</a>, <a href="https://theconversation.com/institutions/university-of-st-andrews-1280">University of St Andrews</a> <h2>The big idea</h2> When asked to estimate how much money they would spend in the future, people underpredicted the total amount by more than C$400 per month. However, when prompted to think about unexpected spending in addition to typical expenses, people made much more accurate predictions. These are the main findings of a series of <a href="https://doi.org/10.1177%2F00222437211068025">studies and experiments that we conducted</a> and which have just been published in the <a href="https://journals.sagepub.com/home/mrj">Journal of Marketing Research</a>. In our first study, we began by asking 187 members of a Canadian credit union to predict their weekly spending for the next five weeks. Then, at the end of each week, we asked them how much they actually spent. For the first four weeks, people underpredicted their weekly spending by about $100 per week or $400 for the month. In the study’s fifth and final week, we ran an experiment to see if we could improve people’s prediction accuracy. Specifically, we randomly assigned participants to one of two groups. In group one, participants estimated their spending for the next week just as they had done in previous weeks. These folks once again significantly underpredicted their spending. In group two, participants were asked to think of three reasons why their spending for the next week might be different than usual before making their estimate. This led them to make higher and much more accurate predictions – coming within just $7 of what they actually spent. Importantly, participants in each group spent roughly the same amount of money that week, on average. The only difference between the two groups was whether they accurately predicted that amount. <iframe id="WlDv3" class="tc-infographic-datawrapper" style="border: 0;" src="https://datawrapper.dwcdn.net/WlDv3/3/" width="100%" height="400px" frameborder="0" scrolling="no"></iframe> Next, we conducted nine experiments to better understand why people underpredict their spending and whether being prompted to think of unusual expenses helps improve accuracy. In all, over 5,800 people participated in these experiments, including a representative sample of U.S. residents. These experiments revealed two important insights. First, people primarily base their spending predictions on typical expenses like groceries, gasoline and rent. They usually fail to account for irregular – though still common – expenses like car repairs, last-minute concert tickets or one-off health care bills. This is what leads to underprediction. Second, prompting people to think of irregular expenses in addition to typical expenses helps them to make more accurate spending predictions. In our studies, people did not factor in atypical expenses unless we asked them to do so. <h2>Why it matters</h2> Helping people improve the accuracy of their spending predictions could help them improve their financial well-being. Underpredicting expenses can be costly. For example, 12 million Americans <a href="https://www.pewtrusts.org/en/research-and-analysis/reports/2012/07/19/who-borrows-where-they-borrow-and-why">borrow a total of more than $7 billion</a> in payday loans each year because they can’t meet their monthly expenses. These loans typically have extremely high interest rates – <a href="https://www.pewtrusts.org/en/research-and-analysis/data-visualizations/2022/how-well-does-your-state-protect-payday-loan-borrowers">more than 250% in some states</a>. Payday loans also come due in full so quickly that around three in four borrowers <a href="https://www.pewtrusts.org/en/research-and-analysis/reports/2012/07/19/who-borrows-where-they-borrow-and-why">end up borrowing again</a> to pay off the original loan. If consumers could better anticipate how much money they will spend in the future, it might help motivate them to spend less and save more in the present. In fact, one of our studies shows that our suggested prediction strategy <a href="https://doi.org/10.1177/0022243721106802">not only boosted spending estimates</a>, it also increased intentions to save. <h2>What’s next</h2> Members of our research team are currently investigating if, when and why underpredicting one’s expenses may be beneficial. For example, if a person sets an optimistically low budget and actively tracks their spending against it, does that help them reduce their spending? We are also investigating whether people who work in the gig economy show a corresponding tendency to mispredict their future income.<img style="border: none !important; box-shadow: none !important; margin: 0 !important; max-height: 1px !important; max-width: 1px !important; min-height: 1px !important; min-width: 1px !important; opacity: 0 !important; outline: none !important; padding: 0 !important;" src="https://counter.theconversation.com/content/189100/count.gif?distributor=republish-lightbox-basic" alt="The Conversation" width="1" height="1" /> <a href="https://theconversation.com/profiles/ray-charles-chuck-howard-1361224">Ray Charles "Chuck" Howard</a>, Assistant Professor of Marketing, <a href="https://theconversation.com/institutions/texas-aandm-university-1672">Texas A&M University</a>; <a href="https://theconversation.com/profiles/abigail-sussman-227057">Abigail Sussman</a>, Professor of Marketing, <a href="https://theconversation.com/institutions/university-of-chicago-952">University of Chicago</a>; <a href="https://theconversation.com/profiles/david-j-hardisty-753777">David J. Hardisty</a>, Assistant Professor of Marketing & Behavioral Science, <a href="https://theconversation.com/institutions/university-of-british-columbia-946">University of British Columbia</a>, and <a href="https://theconversation.com/profiles/marcel-lukas-1236384">Marcel Lukas</a>, Lecturer in Banking and Finance, <a href="https://theconversation.com/institutions/university-of-st-andrews-1280">University of St Andrews</a> Image credits: Shutterstock This article is republished from <a href="https://theconversation.com">The Conversation</a> under a Creative Commons license. Read the <a href="https://theconversation.com/we-tend-to-underestimate-our-future-expenses-heres-one-way-to-prevent-that-189100">original article</a>. </div>

Money & Banking

"The worst is still yet to come": Grim warning for chocolate lovers

Chocolate lovers could be facing a potential nightmare ahead of the festive season as cocoa supplies hit an all time low, driving confectionary prices to a record high. Most of the world's cocoa beans are grown in West Africa, where ongoing inclement weather and crippling crop diseases, coupled with economy-wide pressures like rising labour, packaging and energy costs, have put unprecedented pressure on the chocolate industry in recent months. However, market analyst Rabobank’s Paul Joules told <a title="www.smh.com.au" href="https://www.smh.com.au/politics/federal/why-a-global-cocoa-crunch-will-sour-chocolate-for-years-to-come-20240927-p5ke0w.html" target="_blank" rel="noopener">The Sydney Morning Herald, </a> “the worst is still yet to come for consumers”, as the stockpiles of cocoa that manufacturers have been relying on for the past 18 months have run out. “While hedging has protected many manufacturers from the worst effects of the price rises until now, eventually all these forward contracts will get used up, and prices will have to increase to reflect the current cocoa price,” Rabobank’s Soaring chocolate prices report, released last week, read. Rabobank wanted that the increased costs of manufacturing will be passed down to consumers, with dark chocolate lovers being the most affected due to the high concentration of cocoa. Analysis by Mr Joules found that, worldwide, a 100 gram block of chocolate with 70 per cent cocoa content could rise from $4.90 to $6.50, with a “similar increase could be expected in Australia”. “It can take anywhere from six to 12 months for … price hikes to be reflected in the retail pricing of products,” Saxo Head of Commodity Strategy, Ole Sloth Hansen said. “The trend of shrinkflation is likely to become more pronounced. Consequently, while there might not be a stark rise in the price tags of chocolate items, the quantity offered for the same price will see a reduction.” Image credits: Shutterstock

Money & Banking

Jamie Oliver sells vintage Fiat with unique plate number

Jamie Oliver is putting up his 1955 Fiat 1100 pick-up for auction on Saturday September 28. The celebrity chef, who is an avid car enthusiast, has owned the vehicle since 2012, and it is still in its original and unrestored condition, with just 43,000 km on the clock. The ute was imported from Italy in 1973, and the celebrity chef is the third UK owner of the vintage vehicle. Not only does the ute still have its original steel wheels - with yellow highlights - it has a unique plate number that spells out '677 Yum'. The rear of the car has been embellished by the celebrity chef, with a sticker of a white hearts and the initials J.O which stands for both his name and his wife Juliette, known as Jools. The Fiat 1100 is painted green and has brown vinyl seats, with the spare wheel stowed behind them. It has a four-speed manual gearbox that connects the four-cylinder petrol engine to a live axle rear-end. Classic Car Auctions, the auctioneers selling the car, has assessed the vehicles condition and given it an overall grade of 80 out of 135, meaning that the car is still in 'good condition'. The ute is expected to sell for between £6000 and £8000 ($AU11,700 to $AU15,600). Images: Classic Car Auctions

Money & Banking

Readers response: What was/is your biggest waste of money?

As the cost of living continues to take hold on people's everyday spending, we find ourselves being more careful pinching our pennies. However, despite our efforts, sometimes it's hard to not feel like you're wasting your cash. We asked our readers what was, or is, their biggest waste of money, and the response was overwhelming. Here's what they said. Billy Smooth - Rent and insurance. Felicity Jill Murphy - Many meals that I could not get through. Barry Lenny - Rates and taxes. I get bugger all for the enormous amounts of money I have to pay. Norbert Kratz - Lottery tickets. Sue Meers - The monthly fee for living in a retirement village. Magda Klopper - Craft stuff and clothes I did not wear. Gaynor Hall - Alcohol! Going to stop buying it now. Paula Fortune - Use to be smokes up until I finally quit for good in January 2005! Good thing I did considering how expensive they are now. Sue Brown Leete - A speeding fine I just got. Sandii Smith - Too many things to mention. Image credits: Shutterstock

Money & Banking

Readers response: What are your tips for saving money effectively?

During a time where many people are struggling with the cost of living crisis, many are finding different ways to pinch the pennies. We asked our readers for their top tips for saving money efficiently, and the response was overwhelming. Here's what they said. Anita Thornton - Every month the bank takes a specified amount out of my current account and puts it in a goal saver account! It soon mounts up. Jo Davidson - Do your own cooking, cleaning and anything that you can do yourself. Barry Webber - Know the difference between spending money and wasting money. Peter Connolly - Save first, and spend afterwards. Heather O'Flynn - Take care of the pennies and the pounds will take care of themselves, even if it's a bit outdated now. You can ask your bank to move a set amount from your everyday account into a progress saver account each week and if you set it and forget it, you will get good compounding interest. Erlinda Nabong Mayers - Shop as you need, not as you want. Margie Buckingham - Have a goal to aim for. Len Rawlings - Don't spend if you don't need to. Image credits: Shutterstock

Money & Banking

Readers response: How do you feel about online shopping compared to traditional in-store shopping?

When it comes to shopping for things we want and need, many people have a preference over whether they shop in a physical store or online. We asked our readers which they prefer when shopping for food, clothes or anything else their hearts desire, and the response was overwhelming. Here's what they said. Ellen Polsen - Why would one buy online? I like to feel and see the things I purchase, particularly garments, as fabrics today are mostly rubbish. Jennie Craven - I do a little of each. But usually use stores that I know or brands where the sizing is correct for me. I always use a payment system that I understand. Gail Ladds - I love online shopping! I often forget that I’ve bought something then get a nice surprise when it arrives lol. Debra Coats - Online is okay when you cant go to the store. I did online shopping for about 8 months after open heart surgery but when i was given the all clear to shop and drive, I was in my element as its a moment of getting out of the house and seeing others around me. Karen Peardon - I have done some online shopping (mainly craft supplies) only because I have been very ill for months but I love in-store shopping more. Retail therapy!! Christine Whyte - Have not and will not ever do it, very old school and too wary of the dangers out there, besides I like getting out and choosing for myself. Helga Bonello - I like to see feel and touch products before I buy. Online scammers are a worry, besides we need a reason to go out and be sociable. Olimpia Palumbo - My family does on line shopping and usually end up with the worst fruit and sometimes the wrong items. Image credits: Shutterstock

Money & Banking

"World's biggest" amber nugget worth over $1 million used as doorstop for decades

An elderly woman in Romania has unknowingly used one of the largest known amber nuggets in the world - worth over €1 million ($1.6 million) - as her doorstop for decades. The woman found the stone in the bed of a stream in Colti, a village in the southeast Romania, and used it as her doorstop for years without realising its value. Members of her family also reported that thieves had once broken into her home, but only stole a few pieces of gold jewelry, missing the seemingly insignificant rock. “In their frantic search for valuables, they overlooked the real treasure that was there before their eyes,” they said. It wasn't until after the woman died in 1991 that a relative who inherited her home suspected the doorstop might be more than meets the eye - and he was right. When he sold the amber to the Romanian state, experts at the Museum of History in Krakow, Poland appraised the rock and found that the amber is likely between around 38 and 70 million years old. “Its discovery represents a great significance both at a scientific level and at a museum level,” Daniel Costache, director of the Provincial Museum of Buzau, told local news outlet El Pais. The expert also claimed that the amber is one of the largest pieces in the world and the largest of its kind weighing a hefty 3.5-kilograms. It has now been classified as a national treasure of Romania, and can be found in the Provincial Museum of Buzau, where it has been since 2022. Romania is one of the countries with significant deposits of amber, with Buzau County being one of the areas where you can find these beautiful stones in abundance. The protected area also contains the old Stramba amber mine, which was very productive during the first half of the 21st century, before it was shut down by the communist regime as it was considered unprofitable. Image: Buzău County Museum

Home & Garden

Rare coin hidden for decades to fetch eye-watering sum

Three sisters from the US who inherited a dime coin kept it in a bank vault for more than 40 years, and while they know it had some value, they didn't know just how much until a few years ago. The rare coin, struck by the US Mint in San Francisco in 1975, could be worth more than $US500,000 ($748,000), according to Ian Russell, president of GreatCollections, the auction house selling the coin. What makes the coin depicting President Franklin D. Roosevelt so valuable is that it is just one of two coins missing the "S" mint mark for San Francisco. The other dime sold for $US682,000 (over $1 million) at a 2019 auction and then again months later to a private collector. While avid coin collectors have known about the existence of these two extraordinarily rare coins, their whereabouts had remained a mystery since the late 1970s. “They were hidden for decades,” Russell said. “Most major collectors and dealers have never seen one.” The three sisters from Ohio, who want to remain anonymous, inherited one of the two dimes after the recent death of their of their brother, Russell said. They told Russell that their brother and mother bought the first error coin discovered in 1978 for $27,225, which would amount to roughly $135,000 today. Their parents, who ran a dairy farm, saw the coin as a financial safety net, and it was only until last year that one of the sisters saw the coin first-hand. Russell also said that their brother had reached out to him about seven years ago and told him about the coin, but he too kept it a secret. When Russell told one of the sisters about the potential value of the coin, she told him: “is that really possible?”. The coin, known as the “1975 ‘no S’ proof dime,” will be displayed at a coin show beginning on Wednesday in Tampa, Florida, and before <a href="https://www.greatcollections.com/Coin/1655587" target="_blank" rel="noopener">the auction</a> closes late next month, Russell said. The current highest bidder has offered $US250,000 ($374,000). Images: Great Collections/ Professional Coin Grading Services

Money & Banking

What’s a recession – and how can we tell if we’re in one?

<div class="theconversation-article-body"><a href="https://theconversation.com/profiles/leonora-risse-405312">Leonora Risse</a>, <a href="https://theconversation.com/institutions/university-of-canberra-865">University of Canberra</a> Today’s <a href="https://www.abs.gov.au/statistics/economy/national-accounts/australian-national-accounts-national-income-expenditure-and-product/latest-release">economic data</a> shows that, outside of the pandemic, the Australian economy has slowed down to its lowest annual rate of growth since the early-1990s recession. That’s prompting the dreaded question: are we headed for another one? Any mention of the “R” word can trigger anxiety. Recessions bring job losses and financial strain, and put serious pressure on people’s mental health. These impacts can be especially severe for people who are already experiencing disadvantage and vulnerabilities. But what exactly does it mean to be in a recession? What are the different ways we define them? And are these current approaches the best way to measure people’s economic pain? <h2>What’s a recession?</h2> A bit like the waves of the ocean, our economy is characterised by ebbs and flows in overall activity. Spending and business growth can swell during times of confidence, but slow down when optimism deflates or the economy is hit by an unexpected shock such as a pandemic or climate disaster. This pattern is what economists describe as “the business cycle”. Most of the time, our economy is constantly growing, even if the pace varies. Conventionally, we measure this pace by tracking changes in the level of <a href="https://www.rba.gov.au/education/resources/explainers/economic-growth.html">gross domestic product</a> (GDP) – the overall volume of items and services being produced, bought and sold in the economy. The <a href="https://www.abs.gov.au/statistics/economy/national-accounts/australian-national-accounts-national-income-expenditure-and-product/jun-2024">latest economic growth rates</a> of 0.2% for the June quarter, and 1% over the past year, tell us that the Australian economy is still growing, even if at a slower pace than previous years. Occasionally, the economy slows down to such a grind that economic activity, from one quarter to the next, shrinks. When this happens, the GDP measurements come out negative. When we have two negative measurements of GDP in a row, this is defined as a <a href="https://www.rba.gov.au/education/resources/explainers/recession.html">technical recession</a>. This is what happened to most countries around the globe during the COVID-19 pandemic. Prior to the pandemic, Australia hadn’t experienced a technical recession since 1991. The latest figures tell us Australia is staying afloat for now. But that doesn’t mean it doesn’t feel like a recession to many people. Some other metrics show why. <h2>Other measures of recession</h2> Growth in economic activity is fuelled, in part, by a growing population. Dividing total economic output by the population size, GDP per capita can offer a more accurate picture of people’s economic reality. This population-adjusted measure of economic growth has long fallen into negative territory. Today’s figures tell us that Australia’s GDP per person has been shrinking for 18 months. Our annual per capita growth rate is now -1.5%. <figure class="align-right zoomable"></figure> In the United States, recessions are measured differently again. Recessions are officially declared by the National Bureau of Economic Research (<a href="https://www.nber.org/research/business-cycle-dating">NBER</a>). Unlike technical recessions, these aren’t based on a simple rule. NBER considers a range of measures beyond GDP – including personal income, employment, personal consumption, wholesale and retail sales, and industrial production across multiple sectors – when deciding whether to declare a US recession. <h2>Is Australia heading for a recession?</h2> This is a challenging question to answer because the GDP figures economists conventionally use to diagnose the situation only come to light after a recession hits. Today’s economic figures from the ABS are for the June 2024 quarter – now more than two months old. Measurements of the current economic climate won’t come through in official statistics for some time. If it occurs, by the time a recession is officially diagnosed, we’re usually well and truly in it. A similar limitation applies to the retrospective approach of the <a href="https://www.nber.org/research/business-cycle-dating">NBER</a>, which “waits until it is confident that a recession has occurred”. It’s like a weather forecaster declaring a cyclone has hit only after the wind gusts have blown your roof away. But we can use other metrics to alert ourselves to recession risks before the eye of the storm hits. <h2>Using jobs numbers as a recession alert</h2> One approach is the <a href="https://fred.stlouisfed.org/series/SAHMCURRENT">Sahm Rule</a>, named after its creator, US economist Claudia Sahm. By analysing patterns in the monthly unemployment data that preceded past recessions, Sahm devised a <a href="https://stayathomemacro.substack.com/p/the-sahm-rule-step-by-step">formula</a> to detect when increases in the current unemployment rate were rapid enough to pose a recession risk. The advantage of this approach is that unemployment statistics come out more quickly and frequently than GDP numbers. Many would also argue that monitoring unemployment, rather than GDP, is a more meaningful metric to reflect people’s everyday experiences of the economy and wellbeing. The Sahm approach tracks how quickly the national unemployment rate is currently rising compared to the past year. It’s calculated by comparing the current three-month moving average of the national unemployment rate to this figure’s lowest value in the previous 12 months. This “moving average” approach smooths out the bumpiness of monthly figures. A jump of 0.5% or more signals the economy’s current pattern is on the cusp of recession. While the Sahm formula was developed for the US economy, it does a fairly good job of waving a red flag where recessions previously occurred in the Australian economy, too. Australia’s latest unemployment rate – inching up to 4.2% in July 2024 – pushed the Sahm value up to 0.5%. <iframe id="3d239" class="tc-infographic-datawrapper" style="border: 0;" src="https://datawrapper.dwcdn.net/3d239/5/" width="100%" height="400px" frameborder="0" scrolling="no"></iframe> This indicator doesn’t necessarily mean that a recession will occur. But it suggests policymakers should be on high alert. The Sahm indicator also validates the experiences of job seekers who – despite official definitions that the economy is not in recession – are personally feeling the pressures of a slowing economy and shrinking job opportunities. As our approaches to measuring and managing the ups and downs of the economy continue to evolve, these people-centred metrics are an increasingly important part of our toolkit.<img style="border: none !important; box-shadow: none !important; margin: 0 !important; max-height: 1px !important; max-width: 1px !important; min-height: 1px !important; min-width: 1px !important; opacity: 0 !important; outline: none !important; padding: 0 !important;" src="https://counter.theconversation.com/content/238199/count.gif?distributor=republish-lightbox-basic" alt="The Conversation" width="1" height="1" /> <a href="https://theconversation.com/profiles/leonora-risse-405312">Leonora Risse</a>, Associate Professor in Economics, <a href="https://theconversation.com/institutions/university-of-canberra-865">University of Canberra</a> Image credits: Shutterstock This article is republished from <a href="https://theconversation.com">The Conversation</a> under a Creative Commons license. Read the <a href="https://theconversation.com/whats-a-recession-and-how-can-we-tell-if-were-in-one-238199">original article</a>. </div>

Money & Banking

Do mobile phones cause brain cancer? Science makes definitive call

The question of whether mobile phones - specifically the electromagnetic radiation or radio waves emitted by these devices - cause cancer has been debated and researched for a long time, and now scientists have made a definitive call. A new comprehensive review commissioned by the World Health Organization has found that mobile phones are NOT linked to brain and head cancers. The systematic review, led by the Australian Radiation Protection and Nuclear Safety Agency (Arpansa), examined over 5,000 studies, which included 63 observational studies on humans published between 1994 and 2022 and is "the most comprehensive review to date" according to review lead author, associate prof Ken Karipidis. “We concluded the evidence does not show a link between mobile phones and brain cancer or other head and neck cancers," he said. The review, which was published on Wednesday, focused on cancers of the nervous system, salivary gland and brain tumours. They found no overall association between mobile phone use and cancer, even if people have used it for a long time (over 10 years) or spend a lot of time on their phones. “I’m quite confident with our conclusion. And what makes us quite confident is … even though mobile phone use has skyrocketed, brain tumour rates have remained stable,” Karipidis continued. Despite emitting electromagnetic radiation, also known as radio waves, the exposure is relatively low. Karipidis said people hear the word radiation and assume it is similar to nuclear radiation, “and because we use a mobile phone close to the head when we’re making calls, there is a lot of concern.” He clarified that “radiation is basically energy that travels from one point to another. There are many different types, for example, ultraviolet radiation from the sun." “We’re always exposed to low-level radio waves in the everyday environment.” While exposure from mobile phones is still low, it is much higher than exposure from any other wireless technology sources since they are used close to the head, Karipidis said. The association between mobile phones and cancers came about from early studies comparing differences between those with and without brain tumours and asking about their exposure history. According to Karipidis, who is also the vice-chair of the International Commission on Non-Ionizing Radiation Protection, the results from these kind of studies tend to be biased, as the group with the tumour tend to overreport their exposure. Based on these early studies WHO’s International Agency for Research on Cancer (IARC) designated radio-frequency fields like those from mobile phones as a possible cancer risk, but Karipidis said "this classification doesn’t mean all that much”. This is because the IARC has different classifications of cancer risk, with some substances classified as a “definite” carcinogen (such as smoking), and others as “probable” or “possible” carcinogens. Tim Driscoll, a professor at the University of Sydney and chair of the Australian Cancer Council’s occupational and environmental cancers committee, also backed the systematic review. “I think people should feel reassured by this study … but it’s worthwhile just remembering that the studies aren’t perfect, but the weight of evidence certainly is that mobile phones should be considered safe to use in terms of any concerns about increased risk of cancer,” Driscoll said. Images: Shutterstock

Body

Readers response: What have you had to cut out of your life to cope with cost of living pressures?

As the cost of living continues to rise, many people have had to cut things out of their day to day spending to cope with the financial struggles. We asked our readers what they have had to cut out of their budgets to cope with cost of living pressures, and the response was overwhelming. Here's what they said. Wendy Oliver - We don’t eat out often at all… I spend too much in the supermarket. Christine Brooks - I've cut out steak, good nutritional foods, TV streaming, entertainment, haircuts, new clothes, pets, pool cleaning, and more. Kerrie Dare - I limit steak meals. I've stopped my haircuts to every 4 months. Internet is getting chopped. I can only afford exercise classes twice a week. I don't eat as much fruit as I used too. I only buy groceries when on special. One bottle of wine per fortnight. One slice of sourdough in the morning, which means the loaf lasts a week. I turn on my washing machine around every 10 days & I have quick showers. No eating out or take away. Maybe one cup of coffee per week with a friend. Movies once every 6 weeks as a social group. No concerts or clubs. I drive only locally, so a tank of petrol lasts 1 month. No weekends away. Jane Dawes - No coffees, beauty treatments, hairdresser, eating out, takeouts etc. The trouble is not affording to spend on certain items has a flow on effect for businesses. Everyone is suffering. Lois E. Fisk - Going out to eat or see movies in the cinema or live plays or new clothes. I shop at the least expensive grocery stores as much as possible, and good cuts of meat rarely happen. Janice Stenning - Don't go to the hairdressers as often and don't buy as many clothes. Debra Dugar - Thinking about dropping my extras cover of my insurance. By the time I pay for it, I can't afford the gap you have to pay. Robyn Lee - Living in my own house. I now live with my family. Rhondda Hughes - Well, petrol is expensive so I have to really think if I can afford to visit anyone. I can’t eat meat much and even vegetables can be expensive. We have three chickens so they give us eggs but good quality eggs and healthy chickens require money too. Fortunately I live in Perth so, in comparison to other states, it isn’t as cold however the cost of heating is a significant consideration and therefore I just tend to go to bed. <div style="font-family: inherit;">Felicity Jill Murphy - Stopped going out to shopping centres. That's where I spend money unnecessarily.</div> <div style="font-family: inherit;">Image credits: Shutterstock </div>

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Readers response: What seems too expensive but is really worth the price?

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Readers response: What was/is your biggest waste of money?

Readers response: What are your tips for saving money effectively?

Readers response: How do you feel about online shopping compared to traditional in-store shopping?

"World's biggest" amber nugget worth over $1 million used as doorstop for decades

Rare coin hidden for decades to fetch eye-watering sum

What’s a recession – and how can we tell if we’re in one?

Do mobile phones cause brain cancer? Science makes definitive call

Readers response: What have you had to cut out of your life to cope with cost of living pressures?