What is Income Protection Insurance in Australia?

Did you check out Richard’s guest post on investing in Australia? He talks about the advantages of investing. For those living in Australia, it’s very informative. Plus, his site is even more informative.

Now back to today’s topic. More on life in Australia! You’re probably wondering why the focus on Australia? Well, I’ve always heard it’s an awesome country. Met some Aussies during our Carnival cruise and they were wonderful. Always wondered why life down under is so great.

So, when I ran into something called income protection insurance, it perked my interest. For us Americans, income protection insurance is very similar to disability insurance. I have this coverage through my work. Do you?

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Protect your income with Suncorp income insurance.

This insurance pays benefits to policyholders who are incapacitated and hence unable to work due to illness or accident.

Incapacity is defined by four bases including own, suited, any, and activities of daily living occupation. It’s different tiers that define what tier of incapacitated a person is. There are benefit limits define what percentage of your gross earnings you receive.

The claim has to be valid. I have a coworker at work who took a few months off to deal with a medical issue and received disability benefits. Another director was diagnosed cancer and he took a year off to deal with chemotherapy and recovery. He received disability benefits. Very glad he is back! From my research there usually is a deferred period- the time between a valid claim and the commencement of benefit payments.

Are there any restrictions?

Policies only pay out if the policyholder is unable to work due to illness or an accident.

Income protection in Australia will usually replace up to 75% of a person’s gross income.

There are two types of income protection including indemnity (provided by superannuation funds) and agreed value (pays out the benefit agreed to reflect your income at the start of your policy. it is not affected by fluctuations in income). Agreed value is the most expensive option. Superannuation funds are cheaper and offer less features and less flexibility.

You can determine how much you need by determining your monthly costs. Income protection insurance is meant to provide you an income to pay for your monthly costs.

Remember always become more informed before buying a policy and read the terms and conditions carefully.





My Financial Journey over at BadCredit.Org

I had the opportunity to be interviewed by BadCredit.Org regarding my financial journey.

1. What inspired you to start writing at Savvy Financial Latina?

Savvy Financial Latina started when I was in graduate school. I needed an outlet outside of academia and the blog was born.

I wanted to share my ideas on finance and career. I also wanted to interact with the personal finance community to learn even more.

2. Did you have a background in finance or business?

I did have a background in finance. My undergraduate degree had a focus on finance.

My master’s happened to be in supply chain management, but school doesn’t teach you the basics of personal finance.

3. What sparked your interest in the financial field?

When I was in high school, I worked for a nonprofit. I was the assistant to the executive director and founder.

He taught be about finance. He helped me open a checking and savings account, bought me Quicken and helped me start investing in mutual funds.

In college, I decided I wanted to go in a business direction. I remember talking about Warren Buffett with a friend. We both wanted to be him and learn how he was so successful.

For more, click on this link: A Financial Journey:Savvy Financial Latina


The Most Tax Efficient Investments in Australia

Today I have a guest post from Richard at PF Australia. PF Australia is a financial resource for low income earners looking for practical information on how to better manage their money in Australia. It’s a place to learn about effective ways to control debt, establish savings and get ahead financially.

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As in most countries there are numerous mainstream investment options such as, shares, property, cash, term deposits, etc. and any healthy investment portfolio should have diversity across the board.

Investing in Australia is no different however there are a few investments that allow you to pay little to no tax on your investment. Is there a catch? Of course there is but it is minimal and probably for your own good as it is “time”. The catch is how long you have to be invested before accessing these funds and one option is quicker than the other.

Below are the two tax efficient investment options in Oz.

The first is a bond

This is a great option for investing for your child’s future. Establishing an account when they are born or an infant can go a long ways in covering future costs such as education, car, travel, wedding and more. Bonds are also great options for those who want to diversify their investment portfolio and avoid paying tax. Depending on the bond you go with, returns can range from 5-10%. The big attraction to bonds belong the competitive return is the tax benefit as mentioned before.

With certain bonds, no tax is payable on withdrawals where you have had the investment for 10 or more years. As some investments should be looked at as a long term commitment, this is the best of both worlds as it is medium term and avoids tax!

The second is Superannuation (retirement)

Super is another great investment which also allows for certain tax breaks. There are multiple benefits attached to super depending on your salary. Low income earners can receive certain benefits such as the government co-contribution scheme which is a boost to the bottom line is also not taxed.

The big benefit for Australians on a good or great wage who want to top up their super, is that if you salary sacrifice into super, you are only taxed up to 15% instead of up to 45% depending on your income. As you can see this is a great way to super charge your retirement and pay minimal tax.

The obvious down side of the tax advantage via super is the length of time you have to wait until you can access the cash – but then again certain investments are for the long term and this will allow for a more comfortable living in your retirement years.

The above are two of the most tax efficient ways to invest in Australia with one being mid to long term and the other being long term. Understanding your investing options will allow you to have diversity in your investment portfolio and add another brick to your hopefully solid financial future.

Hope you enjoyed. 

Is Financial Independence Possible?

I, go back and forth on the vision of the future. The pendulum keeps swinging back and forth on whether financial independence is even possible. At work it seems impossible. There is an aging workforce who may not even have the option to retire. If they can’t retire, could we even consider financial independence? I ask a lot of questions. Prodding constantly; trying to figure why they didn’t save up enough money to retire.

People at work constantly say they can’t afford retirement. Not sure why because people at work drive super fancy cars, wear nice clothes, go on nice vacations, and have nice McMansions. I’ve heard some visitors say “wow your parking lot is full of super sleek cars!” So it makes me doubt if we’ll ever get out of the rat race.

My parents don’t have a retirement fund. No, they didn’t overspend their money. They immigrated as blue collar workers and really had no financial education in terms of investments, etc. My parents can save. They are penny crunchers, but they have no clue as to how to invest. Their earning power over the years has not been high. This is a huge problem in the low income immigrant population. A problem I plan to start tackling soon. So their retirement is dependent on their children. This puts a lot of pressure on both my brother and I.

Well, my brother is not necessarily aware of this pressure since he’s only 16. But he will in a couple of years. One of the reasons I’m pushing him so heavily to do well in high school. While I don’t believe in the education system (I think it’s completely broken…topic for another day), I believe it’s one of the best ways for children of low income immigrant families to get out of the cycle of poverty. I’m not the only one. My first boss in high school (I worked for a non-profit) is a prime example. He would remind me of this quite consistently. He came from a blue collar neighborhood in Illinois where you were expected to stay forever working for the factory and have babies. He says his mom never forgave him for leaving, joining the military, going to med school, and rising up to colonel and chief of staff. But it was what allowed him to take care of her in her old age. So, I constantly think about my parents’ retirement. Is anybody facing a similar situation?

After coming across Root of Good’s blog, I got a little more motivated. His main points are living a modest lifestyle and saving. We only need around $40,000 a year to live a modest lifestyle. He wrote a step method to do look at your savings. If a $1,000,000 is your goal, then start with $10,000, and then do $50,000, then, $100,000, etc. Treat every goal like a milestone.

I, also, ended up reading FI’s plan on how he plans to retire by 30. He’s built up passive income through rental properties and dividend income. He’s done great! He’s going to exit the corporate world next year. Pretty great!

So, maybe it’s not impossible. If we never try, we’ll never know. So I’m using a combination of Justin’s (Root of Good) method to set goals. I’ll be talking more about my own personal goals and our goals as a couple in a follow up post.

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Do you think financial independence is possible? Are you working towards it?

Knowing Your Car Insurance Options When You Travel

When you travel abroad or even in your own country, it’s important to know your car insurance options.

When you travel in the states, I suggest paying for your rental car with a credit card that has rental car insurance option. We have our Discover card and it has this option. Before we had a credit card though, we booked a trip with our debit card. Accidents happen. We were in Hilton Head visiting family and vacationing, when we parked our car at a beach. When were only at the beach for about 15 minutes when we decided this wasn’t the beach we were looking for and got up to return to the car. When we came back, someone had made a huge dent on the rental. Too big to be just an accident. Since our debit card did not have rental car insurance protection and we hadn’t bought rental car insurance through the rental car company, we had to file a claim against our own insurance. We didn’t know this will remain on my husband’s record, and be counted against him when insurance companies used their fancy algorithm to calculate his premium.

On a side note: I actually can’t wait for my husband to turn 25 in six months. It’ll suddenly be cheaper for  to rent cars, so we’ll be able to do some cool road trips and my husband’s insurance premium should decrease!

When you travel abroad, check with your credit card company if they cover your rental car. Also, ask for extra coverages. I know in certain countries, where roads are not necessarily as developed as in first world countries, you may encounter super bumpy roads that could hurt your rental car. Costa Rica is a country we hopefully will be able to go see, and I’ve read some rental insurance companies charge extra for needed coverage. Anybody had any sort of experience with this?

In the UK, you can Insure 4 a Day. You can choose the option of one day car insurance, for example, if your car is undergoing repairs. Traveling for a holiday? Choose the option for one week. Or if you don’t drive your vehicle very often, choose a short term solution.

Always have comprehensive insurance when renting abroad—especially in Europe, where your personal car insurance is unlikely to be valid and deductibles are high. If you want to learn more about rental car insurance options in Europe, check out this super informational article: How to Buy Car-Rental Insurance in Europe.

Here’s a recap of the tips that will be useful for all trips abroad:

Paula Lyons of best-car-rental-tips.com says you are likely to get better CDW prices through an independent insurer rather than through the car-rental company. She recommends getting a quote fromtripinsurancestore.com.

Credit-card coverage is good for 30 to 45 consecutive days, depending on the card.


Have you traveled abroad and rented a car? What has been your experience?


The Beginning Of Vehicle Insurance

I love Downton Abbey. Somehow the drama of it all pulls me in on it.

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Did Mary get any monetary protection when Matthew died in a car crash?

Not that Mary needed any more money, but I often wondered if car/vehicle insurance existed by then. But it got me wondering when did we have to start paying car insurance?

Vehicle Insurance is a must have in the United States. You can purchase it for cars, trucks, motorcycles, and other road vehicles. Why buy vehicle insurance? Vehicle insurance provides monetary protection against physical damage or bodily injury that result from vehicle collisions. It protects against the liabilities that arise from these accidents.

Cars began to be used after the WWI in urban cities. Cars were being built to go faster and be more dangerous. When accidents happened, people were left on their own to cover the costs for injury and repairing damage. The UK introduced the Road Traffic Act 1930. The act stated all vehicle owners and drivers had to be insured whilst on a public road.

Additional provisions included:

  • Abolition of all speed limit for cars
  • Introduction of driving offenses including dangerous, reckless and careless driving under the influence of drink and drugs.
  • Compulsory 3rd party insurance
  • 1st UK driving tests, for disable drivers only
  • Classification of motor vehicles
  • Construction, weight, and equipment of motor vehicles
  • Issue of Highway Code

Another fun fact: The act actually removed all speed limits on UK roads for motor cars! Can you imagine not having speed limits!

Insure Daily

This act actually led Germany to enact similar legislation in 1939.

Other countries followed including:

  • Australia
  • Canada
  • Hungary
  • Indonesia
  • India
  • Ireland
  • New Zealand
  • Norway
  • Romania
  • South Africa
  • USA

How do companies determine premium charges? Companies use algorithms that factor in the following:

  • Gender
  • Age
  • Driving history
  • Marital status
  • Vehicle classification
  • Distance

Just wanted to share some interesting information about car insurance. Hope everyone is having a great weekend!


  1. http://en.wikipedia.org/wiki/Vehicle_insurance
  2. http://en.wikipedia.org/wiki/Road_Traffic_Act_1930

How to Handle Challenging People in the Workplace

One of my best traits is my perseverance. I persevered and made it out of the educational system. This may not seem like a big accomplishment but when you consider I started out in the bilingual program and came from a blue collar immigrant family, it’s a big accomplishment. I realize I know when I see the devastating statistics depicting the abysmal low rate of Hispanic student graduation. You know what it makes sense? Nothing was ever handed to me in school. Looking back, I had to fight for everything. While my parents were supportive, I didn’t have my parents walking into the principal’s office demanding any special attention. A lot of my classmates’ parents were heavily involved with the school. I persevere. I figure out a way around roadblocks.

There’s always going to be roadblocks in life. Don’t give up. Find a way around them. There’s always a way. Well, you have to keep that mentality to find the way.

Let’s go back to the title of this post. I’m in the current, precarious situation of being in a feud with a co-worker. No, I did not start it. Nor I am a willing participant in this feud. This person just doesn’t like me. While it usually only causes me mild annoyance since I don’t work with him much, it’s now causing lots of annoyance.

Have you ever heard of lean six sigma? It’s a certification you can get in the business world that is great to have on your resume. Well, this person at work that doesn’t like me is the advisor or the person who holds the gate opened for this certification in our department.

So, I got a hold of this meeting invite. As it often happens in corporate, you almost have to invite yourself in order to get anywhere. Great manners! He approached me in person and asked me why I was going to this meeting. He tried to say oh you have to have a project so and so on. Except I didn’t let him tell me I couldn’t attend. So he finally said ok.

Except he then sent me a cancelled meeting invite. But in reality the meeting happened. Because I found out from another one of my coworkers this meeting still happened. She, also, sentme the invite to next one, which of course he saw. He probably said…”really, I thought I had gotten rid of her.” But alas no. I don’t give up so easily.

A better solution:

He’s not going to be a great advisor. He doesn’t like me. Obviously is immature in handling it. So, I found another advisor in another department who knows his stuff. Who’s agreed to be my advisor. I already have a great relationship.
So, hopefully, by the end of the year, I’ll be able to present my project and look at him in his face knowing with glory he did not get in my way. Evil laugh that’s not so evil.

I’m still unsure as to how to approach this. I think it would be best to tell him, point it out, but I know he is just going to deny it. He’s sneaky like that. I’m going to tell my boss in this manner.

I have found an advisor for my lean six sigma project. He is not in our department because my wonderful colleague did not want to be my advisor. Plus, my new advisor actually has a black belt, has experience in manufacturing and healthcare, and is plain awesome. Booyah.


Here are some tips when dealing with a precarious work situation:

  • Remain calm. Do not react immediately. Reacting when you’re mad is the worst. I have learned my lesson many times.
  • Take time to think your next move. It takes time to heal wounds. Don’t react harshly. Instead take time and plan what you are going to say and how you are going to approach it.
  • Find a way around it. Find an alternative. 

What have you done in similar situations?

The Benefits and Downsides of Working for a Large Corporation

I have written a couple of articles expressing my general feeling towards to the corporation workplace. Sometimes I seem pretty negative; mostly because I’m trying to deal with all the inefficiencies I find. Honestly, I have grown up a lot. I remember my first couple of jobs I was always so frustrated with how slow we were. Now that I think about, the stuff I worried about or complained about then, holds no light to what I have faced in a corporation.

There are a lot of benefits in starting out your career in a large corporation, though including:

  • Higher salary- You may receive a higher salary starting out. This is what initially drew me to the company
  • Better benefits – Medical and retirement benefits are an important part of your compensation package. Always remember to consider these benefits when negotiation your compensation. A large corporation usually has above average medical benefits because they are able to negotiate with the medical insurance companies based on their larger volume and risk spread.
  • Resume booster – Most companies like seeing a big name company on your resume. Think about it? If it’s a large corporation, most people will know about it.

There are some downsides, which I have already discussed before including:

  • Office politics – It’s worse than The Office. Much, much worse. Well, at least in my company. You learn to be strategic and pensive on your moves. It’s like a chess match!
  • Lack of ownership – You’re so low in the totem pole; your contribution may seem insignificant.
  • Silos – so many silos. Groups don’t talk to each other. Groups compete with each other.
  • Far away from the money – We have so many divisions, so many operations, engineering groups. You name it, we have it. So how do you really know if you company is making money?

It’s been about 18 months since I started out working for a large corporation. I have learned so much. I really want to be passionate about my job, but sometimes I wonder if I should just stay quiet and collect my paycheck. Except I can’t! I’m an ideologist, and just can’t succumb to the status quo.

You really start picking up different ways to be successful. And I will be writing about these ways in a follow up article.

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What has been your experience working for your company? Have you had different experiences with small, mid, or large corporations? Please share!

Applied for a Travel Rewards Card

Well, there’s a first time for everything, and I just applied for my first credit card in my plan to churn cards for the purpose of traveling.

I’m not the first one to do it, and definitely not the best at it. I did some research before taking the plunge and honestly, should have taken the plunge a month ago right after closing on the house. We are spending so much on home improvement and furnishings for the house, it would have been easy to hit the limits. Plus, I have found we spend extra on top of our regular spending, it doesn’t incentive us to stop spending. It actually makes us care less. Our attitude goes something like this:

“Hey, we are already spending so much, what’s another $10?” And then, another $10 turns into another $10 and so on and so on. You get the gist.

This year we want to travel a lot, so it would be pretty cool if we could score some free miles to get us closer to our travels, wouldn’t it?

I read several articles from fellow bloggers including:

Holly when she wrote about credit card churning not too long ago. She’s currently churning the American Express Business Gold Rewards Card, Chase Hyatt Credit Card, Citi Aadvantage World Mastercard, Chase Southwest Rapid Rewards Plus Card.

I, also, check out Noob Traveler. If you haven’t checked out his website, you must. It’s all about traveling for pennies by credit card churning. He, recently, checked US Airwars, & 65K Virgin Atlantic.

I was really undecided between a Southwest Airlines card and a Citi Aadvantage card, but I decided we will need the points if we choose to go to Peru this year. Plus, I already have some points on my AA Rewards from my trip to Mexico. Hopefully my job sends me a couple of places and I will make sure to fly AA to get some even more points.

***Link is not sponsored.

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Here’s the offer if you are interested: Citi Aadvantage World Mastercard.

  • Earn 50,000 American Airlines Aadvantage bonus miles after spending $3,000 in purchases within the first 3 months of card membership.
  • Get the first eligible bag checked free for you and up to 4 travel companions
  • Enjoy Group 1 boarding and use the extra time to prepare your flight
  • Earn a $100 American Airlines Flight Discount each year card membership in which you spend $30,000 or more in purchases and renew your card membership.
  • Earn AAdvantage miles for using Aadvantage miles. Earn 10% of your redeemed Aadvantage miles back – up to 10,000 aadvantage miles each calendar year.
  • Earn 2 AAdvantage miles for $1 you spend on eligible American Airlines purchases and 1 Aadvantage mile for every $1 spent on other purchases
  • Receive a 25% savings on in flight food and beverage purchases when you use your Citi/Aadvantage card.
  • Fly using fewer Aadvantage miles with Reduced mileage awards.

I’m not sure yet if I have been approved yet, but I will find out in a week. Let’s hope I get approved.


The Agonising Dilemma of Interest Rates versus Wages

It must be a pretty nerve-racking job to be an economist in today’s UK. There are so many variables to consider, so many reports that one month indicates one thing and then apparently seem to contradict themselves just a few months later. While most would agree that the current government has done a pretty good job of steering the UK economy on the right path, with the Gross Domestic Product appearing to increase a few Screen Shot 2014-01-28 at 7.33.10 PMpercentage points, when compared to 2012, there are still many variables that have to be considered. Unemployment is still high, although it is falling just a tad. Consumers seem to be spending again, especially over the recent Christmas season, perhaps clinging to the hope that the worst is over and better times are ahead. But moving forward into 2014, there is a very slippery slope that confronts economic policy, when considering what mortgage interest rates should be and how they will affect homeowners.

The Bank of England Makes the Decision

The Bank of England is tasked with a heavy burden: where to peg interest rates, especially in regards to home mortgages. Their rates have been at a historical league low of 0.5%, which has allowed a lot of lending institutions to provide mortgages to a wide variety of people. You have seen what happened next. The housing market took off like an Apollo rocket headed to the moon and so far, has not looked back. But here is where a little dose of Russian roulette is involved. If the Bank of England decides to raise interest rates, but both unemployment and wages don’t increase, either ahead of time, or simultaneously, it could lead to disaster. An association known as the Council of Mortgage Lenders recently reported that mortgages jumped by almost 30% in the last 12 months ending this November. Yes, a lot more houses have been purchased. That has been good for the economy. But the Bank of England also estimates that the average household debt remains at £87,000, which is dangerously high.

Can real wages outpace mortgage rates?

Given the fact that the UK economy is still fairly shaky, especially with the manufacturing sector not producing as much as the Coalition would like, is there any real chance that wages will increase, even by 5%, across-the-board anytime soon? Nobody has a crystal ball, but given the current economic realities, it appears highly unlikely. If interest rates jumped from their current basement of 0.5% to say, 3%, the number of households that would be challenged to meet their increased mortgage payments would balloon. According to the Bank of England’s own estimates, what they referred to as “vulnerable mortgagors” would more than double and nobody wants that. So the Bank is going to have to proceed with caution, hopefully not raising mortgage rates until there has been a substantial drop in the unemployment rate, coupled with an increase in real wages.

Stay Out Of Harm’s Way

If you are able to budget your household expenses in such a way that you can put aside some money for savings on a monthly basis, your best bet is to look into ISA Accounts. With these great savings accounts, you won’t pay any taxes on the interest that you earn and you will also be safe in the knowledge that you’re getting excellent rates of return. While you cannot control what the Bank of England will do, you can certainly put your own financial house in order.

Image courtesy of: freedigitalphotos.net Stuart Miles


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