crocodile wrote on Oct 23
rd, 2019 at 12:24pm:
Absolutely astounding how ignorance pervades this board. Anybody with an ounce of understanding of finance and compounding would see the government scheme as pretty generous. But only if they bothered to get off their fat grubby arses and actually read then understood how the scheme works.
The government 5.5% is charged only as the loan is drawn down. The banks, including Household Capital charge principal and interest. A subtle difference with a gigantic impact.
Just suppose that Marge and Fred have spent their super at 75 and need an extra $13000 pa for 10 years when the amount due will come from their estate.
Government scheme 13000 * ( ( 1.055^10 - 1 ) / 0.055 ) = $167379.60
Household Capital 130000 * 1.0515^10 = $214800.91
Total interest:
Government = $37379.60
Household = $84800.91
The idiot that wrote the article is a fukkwit and so are the fools that swallowed it.
Quote:The government 5.5% is charged only as the loan is drawn down.
Your ignorance is there for all to see. It is patently clear that you have no understanding of these loan types.
1) Actually the loan is payed out each foughtnight by effectively extending the loan as the payments are made. You can not take a lump sum up front in which case you would be able to accrue interest. Any interest is being collected by the government.
For the purpose of illustration the compounding period is irrelevant. It only changes the end amount with the non government mob coming out worse who incidentally compound daily
Note: the government still have full access and control over the money that they have not loaned the pensioner yet, it would be immoral to charge the pensioner interest on this money as it is simply not the pensioners money yet..
You're confused again. I never said that they did. Quite the opposite in fact.
They don't. That's the difference. They charge interest only on the amount forwarded which incrementally accrues from that date.
Your idea of charging interest on money before it is accessible and has not been loaned - is a bit rich.
You're confused. I made no such statement.
Yes your claim is incorrect but only in terms of fact.
No. You are just too dumb to understand
In terms of the two loan types you are comparing apples to lady's Lingerie.
Yes, that's because the two loan types are different. Something that doesn't appear to have gotten into your skull just yet. No point comparing the same thing.
Without all the but But But But's the loan is being charged interest at 5.5% when the Res Bank interest rate is at 0.5%. - Yes the government are profiteering on pension loans.
2) Who to believe some internet hack or the financial analysis of the
Australian Financial Review ?
I know which way I would be going on that one.
I don't really give a fukk who you want to believe. Joanne Mather with absolutely no finance qualifications whatsoever is fine by me. Keep your head in the sand for as long as you want.
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